Find out more:

VISIT

GO ONLINE societegenerale.com.gh

2020 ANNUAL REPORT AND FINANCIAL STATEMENTS 2020 Major Events

WE INTRODUCED INNOVATIONS

Our all new innovation lab

WE LAUNCHED NEW SERVICES

Easily pay your customs duty Pay for all government services at any SG branch and taxes at any SG Ghana branch 2020 Major Events

WE LAUNCHED EXCITING COMMERCIAL PROMOTIONS & CAMPAIGNS

Loans Promotion Cards Promotion

àƺǝǣƬǼƺˡȇƏȇƬǣȇǕȒǔǔƺȸǔȒȸȒɖȸƬɖɀɎȒȅƺȸɀ in collaboration with CFAO Motors

WE OPENED MORE OUTLETS

Airport City Branch Derby Avenue Branch Lapaz Branch

TABLE OF CONTENTS

Overview 2 Our purpose and values in the service of our clients

4 Notice and Agenda for Annual General Meeting

Corporate Governance 5 Corporate information

6 Profile of the board of directors

9 Key management personnel

Strategic Report 12 Board chair’s statement

14 Managing Directors Review

Financial Statements 18 Report of the Directors

28 Corporate structure

33 Statement of Directors Responsibilities

34 Independent Report of the Auditors

38 Financial highlights

40 Statement of profit or loss and other comprehensive income

41 Statement of financial position

42 Statement of changes in equity

43 Statement of cash flows

44 Notes to financial statement

99 Proxy Form 100 Resolutions 102 Branch network

SOCIETE GENERALE GHANA PLC 1 OUR PURPOSE AND VALUES IN THE SERVICE OF OUR CLIENTS

OUR PURPOSE segments by tailoring our support to the issues facing each Building together with our clients, a better and sustainable one of them; future through responsible and innovative financial solutions. y connecting people and businesses: creating a link between those who have projects and those who can help them; OUR MISSION STATEMENT The ’s mission is to create the preferred banking institution, y using our resources responsibly: putting our balance sheet which employs team spirit, innovation, responsibility & to work to help those who want to invest; commitment to provide quality products and services that best y evaluating and managing risks: managing risks in a satisfy the needs of our customers. rigorous and responsible manner over the long term; OUR VALUES: TEAM SPIRIT, INNOVATION, RESPONSIBILITY & y safeguarding interests: undertaking a commitment to COMMITMENT respect and protect everyone’s interests while aiming for the highest standards of security and quality of service. Team Spirit: is characterised by a sense of service which

is intended to make the leading customer relationship bank and making listening to customers Customer satisfaction: A priority Customer satisfaction is regularly measured and has increased and all other stakeholders, information sharing and solidarity or remained steady at a high level in all our business lines. The as well as cooperation and internal pooling of resources its Bank has adopted a structured approach to monitor customer main priority. satisfaction using a range of tools: opinion surveys, surprise

visits, questionnaires and net promoter score ratings. A Innovation: which is providing added value and greater formalized process to address complaints by our quality team is simplification to serve clients with a framework that takes into in place with the protection of our clients being at the forefront account reputational risk. of all our operations. We are committed to safeguarding their

interests, particularly in light of the growing risks associated Responsibility: that consists of taking decisions quickly with cybercrime. to meet the needs of clients and the organisation without sacrificing their long-term objectives. It also involves having the courage both individually and collectively to take responsibility Corporate culture and ethics For Societe Generale Ghana instilling a culture of responsibility for actions and decisions and finally attaching as much based on strong values, notably through our Code of Conduct, importance to results as well as consequences of decisions for means observing the highest standards of integrity and all stakeholders. behaviour in all business lines and countries where we operate. The Bank has established ethical principles and ensures that Commitment: which makes it possible to make a difference all our staff comply with them. As a responsible employer, and to contribute to the success of clients and the Bank thereby we are committed to ensuring the respect of human rights resulting in a high level of service and performance. and implement appropriate measures in instances where our principles are not adhered to. OUR PURPOSE Helping our clients build the future Expertise and skills We reaffirm the importance of our role as bankers which is The Bank pays particular attention to the quality of our to help our clients invest in a more sustainable future. By dialogue with staff representative bodies, especially with supporting their projects and helping them grow, we are firmly respect to addressing the challenges of changing business and committed to those who move the world forward. employment trends. Anticipating the Bank’s business needs, hiring and helping our staff develop their careers, particularly A trusted partner through training and internal professional mobility and Societe Generale Ghana puts value creation for its customers promotions, are essential for attracting and retaining talent at the heart of its business model, placing itself alongside and strengthening staff loyalty. entrepreneurs growing their businesses and developing their projects. The Bank offers added value in every aspect of its Diversity and inclusion business and in each of its business lines: Building a company that is inclusive and refects the diversity of its customers is one of the Bank’s key ambitions. Above y making life easier for our customers: assisting our and beyond regulatory obligations, Societe Generale treats customers by providing them with the right service at the diversity and inclusion for all as strategic issues for today and right time, combining the best that humans and digital tomorrow, and takes proactive steps in this regard. technology have to offer; y advising: putting our expertise to work for all customer

2 SOCIETE GENERALE GHANA PLC Performance and compensation Health and safety To attract and retain talents, Societe Generale Ghana Societe Generale Ghana is committed to developing a respectful implements an attractive and fair pay policy, which recognizes and safe working environment to enable every one of its staff each staff member’s contribution to the Bank’s performance members to work in conditions that are positive for their health while ensuring the appropriate management of risks. and well-being, in particular by promoting the appropriate work-life balance.

SOCIETE GENERALE GHANA PLC 3 NOTICE OF VIRTUAL ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 41st Annual General Meeting (“AGM”) of the Shareholders of Societe Generale Ghana PLC (“the Company”) will be held VIRTUALLY and streamed live on https://sgghanaagm.com from the Head Office of Societe Generale Ghana PLC on Thursday 30 September 2021 at 11:00am to transact the following business: -

ORDINARY BUSINESS: ORDINARY RESOLUTIONS 1. To receive and adopt the Financial Statements of the Company (together with the reports of the directors and the auditors of the Company) for the year ended 31 December 2020. 2. To re-elect a Director; the following director retiring by rotation pursuant to Section 88(1) of the Company’s Constitution who being eligible, offers herself for re-election

y Mrs Laurette Otchere

3. To elect a director; the following director appointed during the year and retiring in accordance with section 72(1) of the Companies Constitution

y Francis Awua-Kyerematen

4. To approve Directors’ fees

5. To authorize the Directors to determine the remuneration of the Auditors

Dated, this 24 day of March 2021.

...... BY ORDER OF THE BOARD ANGELA NANANSAA BONSU THE SECRETARY

+233 302214314 [email protected] www.societegenerale.ghana.gh @societegenerale.ghana Societe Generale Ghana @SG_Ghana

4 SOCIETE GENERALE GHANA PLC CORPORATE INFORMATION

BOARD OF DIRECTORS

1. Margaret Boateng Sekyere - Board Chair Independent Non-Executive 2. Hakim Ouzzani - Managing Director 3. Laurette Korkor Otchere - Non-Executive 4. Agnes Tauty Giraldi - Non-Executive 5. Georges Wega - Non-Executive 6. Arnaud De Gaudemaris - Non-Executive 7. Martine Hitti - Independent Non-Executive 8. Fosuhene Acheampong - Non-Executive 9. Francis Awua-Kyerematen - Independent Non Executive

COMPANY SECRETARY Angela Nanansaa Bonsu Societe Generale Ghana PLC 2nd Crescent, Royalt Castle Road Ring Road Central P.O. Box 13119 , Ghana

REGISTERED OFFICE 2nd Crescent, Royalt Castle Road Ring Road Central, Accra P.O. Box 13119 Accra, Ghana

AUDITORS Ernst & Young Chartered Accountants No G 15 Building Airport Residential Area White Avenue Accra Ghana PO Box KA 16009 Airport, Accra, Ghana

REGISTRARS NTHC Limited Martco House P.O. Box KA 9563 Airport, Accra Ghana

COUNTRY OF INCORPORATION Ghana, Accra

HOLDING COMPANY SG , Holding Company

ULTIMATE HOLDING COMPANY Societe Generale incorporated in

SOCIETE GENERALE GHANA PLC 5 PROFILE OF THE BOARD OF DIRECTORS

MARGARET BOATENG SEKYERE (Chairperson)

EXECUTIVE DIRECTOR

HAKIM OUZZANI (Managing Director)

INDEPENDENT NON-EXECUTIVE DIRECTOR

FRANCIS AWUA-KYEREMATEN (Member) MARTINE HITTI (Member)

NON-EXECUTIVE DIRECTORS

GEORGES WEGA (Member) AGNES TAUTY GIRALDI (Member) LAURETTE OTCHERE (Member)

ARNAUD DE GAUDESMARIS (Member) FOSUHENE ACHEAMPONG (Member)

BOARD SECRETARY

ANGELA NANANSAA BONSU (Company Secretary)

6 SOCIETE GENERALE GHANA PLC Profile Of The Board Of Directors cont’d

Margaret Boateng Sekyere: Board Chair. She received a Laurette Korkor Otchere: Non Executive Director. She is a Bachelor’s degree in Accounting and an MBA from Howard Barrister at Law and a Deputy Director General Operations and University in Washington D.C in 1985 and 1987 respectively. Benefits at Social Security and National Trust. She From 1985 to 1989 she was in Public Accounting and Mortgage holds a Juris Doctor; a Bachelor of Arts in Economics and is a Banking in the USA after which she joined Price Waterhouse Certified Professional in Human Resources (SHRM-CP). She is in Ghana as a Management Consultant with special focus on a member of the Ghana Bar, State of New Jersey Bar and the Financial Management Reviews and Assessments of donor United States District Court, District of New Jersey. She is an funding to public sector institutions. With over 30 years of Adjunct Professor at Rutgers University School of Management experience in private and public sector management, she and Labour Relations and the Society for Human Resource was instrumental in the development of public sector reforms Management. She has extensive working and professional in in the early 1990s and in Ghana from 2004 to experience internationally and locally. She joined the Board of 2007. In 1993, she was recruited by the Government of Sierra Directors in July 2017 with granting approval on Leone to manage a 5 year Public Sector Program funded by 6 September 2017. the World Bank. She served as a Senior Resource Management Officer of the World Bank Office in Ghana from 1998 to 2003. Whilst there, she managed the administrative services and Agnes Tauty Giraldi: Non Executive Director. She is the Head accounting team in the Country Office including training, of Export Finance , Europe and Structured Trade Finance, systematic back-up and replacement planning. She played a Societe Generale Corporate and Investment Banking. She has key role in the coaching and development of newly recruited over 23 years’ experience in the Corporate Investment Banking resource management staff for Country Offices in the Africa sector with an extensive experience of Structured Trade and Region – , , Zimbabwe, Malawi, , Export Finance. She has solid experience in emerging markets Ethiopia and . From 2007 to 2013, she joined a team and has led several deals involving sovereign, sub-sovereign, to set up an Asset Management Firm – OAK Partners Ltd., - public and private corporates. She is currently the Head of providing financing for private real estate projects in Accra. Export Finance Africa, Europe and Structured Trade Finance, During the period of 2013-2018, she was an Executive Director Societe Generale Paris. Within the Societe Generale Group, of Finance and Administration for Belstar Capital. At Belstar, she has held the following positions; Deputy Head Origination she also played a key role as a Licensed Investment Advisory Export Finance, Head of European Origination Export Finance, Representative of the Securities and Exchange Commission, Country Manager in the Europe and Central Asia Desk, responsible for compliance of financial regulatory matters. She Societe Generale Paris, Vice president Societe Generale Paris was nominated to the Board of Directors on 12 July 2019 with responsible for the execution of the documentation ( Bank of Ghana granting approval on 20 November 2019. Bank documentation, credit insurance, securities, etc.), Corporate of Ghana further approved her appointment as Board Chair on Relationship Manager, Societe Generale London Relationship 15 September 2020. Manager SMEs, French Network, Societe Generale. She was nominated to the Board of Directors on 11 April 2018 with Bank of Ghana granting approval on 1 October 2018. Hakim Ouzzani: Managing Director. He holds a Bachelor of Arts degree in Economics and a Master of Arts degree in Organisation Sociology from the Ecole Nationale Superieure d’ Georges K. T. Wega: Non Executive Director. He holds a Administration et de Gestation National School of Management Bachelor of Science in Industrial Engineering and a Master of and Administration. He also holds a Diploma in Banking and Science also in Industrial Engineering (General Management). Finance from the Institute of Development Finance Tunis. His career spans over 22 years having worked in several Mr Ouzzani has a Diploma of Higher Education from the capacities in organizations around the world. He worked Arab Maghred Development Financing Institute. Before his primarily as a University Lecturer, then for Canada Post appointment as Managing Director, he was a Senior Executive Corporation, General Electric, Bank and United Bank Regional Manager with Societe Generale International Banking for Africa. Within the Societe Generale Group, he has also Financial Services in charge of Cameroun, , Congo worked with SG , SG and has served as the Brazaville, Equatorial , Ghana and Guinea Conakry. SG Regional Director for West Africa. He was nominated to the In 1998, he was the New Products Development Manager at Board of Directors on 22 November 2018 with Bank of Ghana the Union Bank. He has worked as a Professor at the Ecole granting approval on 16 August 2019. Superieure de Banque. He also worked with the Central Bank of Algerie as a Senior Officer & Refinancing Direction and Licencing & Regulatory Function. From 2000 to 2002, he Arnaud De Gaudemaris: Non Executive Director. He holds managed the Corporate Branch of the Union Bank Brokerage an Engineering Degree from ISEP Paris. He is the current From 2012 to 2016, he was the CEO of Societe Generale Chad. He also held various positions within the Societe Generale as Chief of Staff to the Head of Societe Generale for the AFMO Group Deputy General Manager SG Algerie, Network and Sales Region managing about 14,000 staff. He is responsible for Manager SG Algerie and Network Development Manager SG the organization of strategy preparation meetings, internal Algerie. Mr Ouzzani was nominated to the Board of Directors management meetings and also the African Region strategy. of Societe Generale Ghana on 16 November 2016 with the Bank He was nominated to the Board of Directors on 28 November of Ghana granting approval to the said appointment on 23 2018 with Bank of Ghana granting approval on 16 August 2019. January 2017.

SOCIETE GENERALE GHANA PLC 7 Profile Of The Board Of Directors cont’d

Martine Hitti: Independent Non Executive Director. She From 2010 to 2012, he was the Group Head Marketing Division holds an Engineering Degree from the Ecole Nationale Superiere Retail of Intercontinental Bank. He also worked with the Bank d’information pour l’industrie et l’entreprise in France. She as Head of Loan Recovery. He was nominated to the Board in retired from the services of the Societe Generale Group in April 2020 with Bank of Ghana granting approval of the said 2014 and currently works as a consultant. Whilst working with nomination on 3 June 2020. Societe Generale, she held the following positions; Director of Information Systems, Chief Information Officer International Mr Francis Awua-Kyerematen: Independent Non-Executive , IT Manager Cash Flows, Skills Development Director. He is a Fellow of the Association of Chartered Certified Manager, IT Securities Manager and IT Communications Accountants. He holds a Master of Business Administration from Manager. She was nominated to the Board of Directors on 12 the University of Chicago Business School and a Bachelor of Arts April 2019 with Bank of Ghana granting approval on 6 November Honours Degree in Accounting and Finance from the Middlesex 2019. University London UK. He is the Principal Advisor and Managing Director for Winchmore Capital. Mr Awua-Kyerematen worked Mr Fosuhene Acheampong: Non Executive Director. He is a as the Country Director for Citibank Ghana from 2008 to 2016. chartered accountant by profession and holds an MBA in Finance Prior to moving to Ghana, he was with Citigroup in the London from the State University and a Bsc in Accounting from Office responsible for Debt Capital Markets – Middle East & the University of Lagos. He is currently the Director of Finance African Desk from 2005. He also worked as a Senior Compliance and Administration at the Cedar Seal Company Limited. From Accountant for HM Revenue Customs in the UK from 1998 to 2001-2004, he was the Audit Manager at Deloitte & Touche . He 2003. He also spent a year with Grant Thornton Ipswich Office was the Chief Internal Auditor at the Minerals Commission from UK as a Senior Corporate Finance and Recovery Associate from 2004-2005 and went on to become the Director of Finance from 1997 to 1998. Mr Awua-Kyerematen was nominated to the 2005-2006.From 2010 to 2016, he held the following positions Board 14 December 2020 with Bank of Ghana granting approval in the Access Bank Group; Head Business Banking and Regional to the said nomination on 23 February 2021. Head Western Region. Before the name change to Access Bank, Mr Acheampong worked as Area Manager of Intercontinental Bank for the Western and Ashanti Regions from 2008 to 2010.

8 SOCIETE GENERALE GHANA PLC KEY MANAGEMENT PERSONNEL

Hakim Ouzzani: Managing Director. Please refer to the section Secretary for a Bank listed on the Ghana Exchange, Ms under Board of Directors. Bonsu also has oversight responsibility for Permanent Control, the Legal Department, Communications, Environmental & Francois Pousse: Deputy Managing Director. He holds a Social Management Systems, Sustainable Development & Master of Science in Finance and Economics from the London Corporate Social Responsibility. School of Economics (UK) and from Ecole Nationale des Ponts et Chaussées (FR). Prior to his appointment in SG Ghana, he Felix Adjaku: Chief Finance Officer. He is a Fellow of the worked for Inspection Generale at Societe Generale Head Office Association of Chartered Certified Accountants (ACCA) UK in Paris for 9 years, where he performed and supervised audit and holds a Bachelor degree in Sociology from the University and strategy consulting assignments for the top Management of of Ghana. Felix has worked in various departments of the the Societe Generale Group. He has worked in various fields in bank namely Corporate banking as a credit analyst, Treasury the banking sector such as IT transformation in retail banking, department as an Asset and Liability Management officer and market risk on equity derivatives and anti-money-laundering. as a branch officer within the Retail Banking department. Working in diverse business environments such as Southern Before being appointed the Chief Finance Officer he was the France, Hong-Kong, Burkina-Faso, the UK and USA has added Head of Financial Reporting and performance measurement. to his wealth of knowledge. He eventually became one of the Felix has 11 years’ experience in banking. Managing directors at Inspection, with shared oversight over a team of 120 people made up of Inspectors, data scientists and Kwame Anterkyi: Chief Risk Officer in charge of Credit support staff directly reporting to Global Head of Inspection. Mr and Market Risk. He is a graduate of the Kwame Nkrumah Pousse is also the Treasurer of the Chamber of Commerce and University of Science and Technology Ghana with a Bsc. in Civil Industry France – Ghana (CCIFG). Engineering and a Master of Business Administration (Finance Option) from the Ghana Institute of Management and Public Bernice Allotey: Chief Operating Officer. She holds an Administration (GIMPA). He is also a professionally qualified Executive Masters in Business Administration (Finance) and BSC member of the Chartered Institute of Bankers (Ghana). Kwame in Computer Science and Statistics both from the University of Anterkyi has over 17 years banking experience specializing in Ghana, Legon. She is a proven Project/Programme Manager Corporate and Institutional Banking anchored on a strong and a Lean Six Sigma Green belt trained. With over 24 years’ credit risk analysis background having worked as a Credit experience in the Banking industry, she has built strong Analyst and in Senior Relationship Management positions. He expertise in Project/Change Management, delivering and is a member of the Credit and Market Risk Committee of the overseeing strategic projects that cuts across all the various Bank. functions in the Bank. She has also worked on Project Portfolio Management, Information System Management, Business Abena Asare-Menako: Acting Chief Compliance Officer. Process Management and Banking operations. Before her She is an experienced banking professional with expertise in appointment as the COO, she was the Head of Organization Resource Management, Retail Banking, Business/Corporate and Projects in Societe Generale Ghana from 2008 to 2018 and Banking, Sales, Marketing, Relationship Management, Card was responsible for the implementation of the bank’s Project and POS (Payments) Management, Banking Operations, Portfolio by ensuring overall alignment of the organizational Operational Risk, Compliance Management and Project structures to the business strategy. As the Chief Operating Management. She possesses excellent interpersonal, analytical Officer, she now oversees the following strategic departments; and organizational skills with the ability to excel within highly Organization and Projects, Information Systems & Technology, competitive environments where leadership skills are the keys to success. She is an effective manager with the proven skills Information security, Operations, Logistics and Physical necessary to direct, train and motivate human resource to its Security. fullest potential while also possessing a strong capacity to focus on strategic intent with revenue generation and management Angela N. Bonsu: Company Secretary General Manager. of cost. She is also responsible for ensuring the Bank complies She holds a Master of Business Administration from the with all relevant anti-money laundering regulations by providing advice to management and ensuring compliance Middlesex University Business School, London and an honours with local and related Financial Security Topics including but degree in Law from Birkbeck College, University of London. not limited to Anti-Money Laundering, Sanctions and Embargo, She is a professionally qualified member in good standing KYC and Correspondent Banking. She holds a Masters degree in with the Institute of Directors Ghana. She has rich professional Finance from University of Leicester, U.K. and is an Associate of experience in Company Secretaryship, Compliance, Corporate the Chartered Institute of Bankers, Ghana and the Institute of Governance, Business Integration, Global Employee Share Marketing U.K. Ownership Programmes, Legal Administration, Human Resource, and Project Management with over two decades Catherine Johnson: General Manager Treasury and Global of experience working in various capacities. As the Company Markets. She holds a BSc Accounting Degree from Cardiff

SOCIETE GENERALE GHANA PLC 9 Key Management Personnel cont’d

University in Wales and is a member of the Association of Permanent Control and Operational, Risk, with oversight Cambiste Internationale (ACI) based in Paris She also holds responsibility for Managerial Supervision, Business Continuity a Master’s Degree in International Securities, Investments and Crisis Management, Compliance Anti Money Laundering and Banking from the ISMA Centre, Henley Business School, and Operational Risk. In 2020 Dorcas was appointed Head UK with a special focus on Financial Engineering and Fixed Human Resource Management Income Solutions. She has over 20 years’ extensive commercial banking experience both in Ghana and internationally. Frank Lawoe: Head of Internal Audit. A Chartered Accountant Her vast experience over the years cover areas of Strategy, by profession,he holds a Bachelor of Commerce degree from Business Development, Treasury Management, Corporate the University of Cape Coast and Executive MBA in Finance from Banking, Balance Sheet Risk Management and Market/Trading the University of Ghana. He is also a Member of the Institute activities. She is currently in charge of managing the assets and of Chartered Accountants (Ghana) and Institute of Internal liabilities structure of the bank and has direct responsibility for Auditors (Ghana). He has over 17 years’ experience in banking developing market/trading teams, products/solutions, funding with strong and proven expertise in internal audit, credit risk and the general trading framework. She also manages key management, retail and corporate banking, and debt recovery. treasury relationships with the Regulator, Financial Institutions and Clients. Paul Agyenim Boateng: Head, Permanent Control. He is a chartered Accountant (CA Ghana) and a Chartered Taxation Fred Obosu: General Manager Corporate Coverage. He holds practitioner by profession. He also holds an MBA from the a Master of Business Administration from the Kwame Nkrumah Business School, University of Ghana, Legon and an M.Phil in University of Science & Technology, Bachelor of Arts (Hons) Development Project Analysis (AgricEcons) from the Faculty of degree in Economics from the University of Cape Coast; Bsc Agric, Univeristy of Ghana, Legon. He has extensive knowledge (Hons) in Banking Practice and Management from IFS School in banking and has worked in various capacities in Retail of Finance UK and a Professional Post Graduate Diploma in Banking and Inspection as an Inspector, Mission Head & Head Marketing from the Chartered Institute of Marketing UK. With Inspection. Paul has also worked in the Finance department over 15 years’ experience in the Banking Industry, he has gained as Deputy Head Finance and Acting Head Finance and then significant experience in Corporate and Investment Banking, to IT Department as Deputy Head of the Microbanker Banker Commercial/SME banking, Product & Business Development, Project (a core banking software). In addition, he was engaged Cash Management, Supply/Value Chain Financing, International as the Anti-Money Laundering Officer of the Bank and Head Trade Finance spanning various industries and sectors. of Permanent supervision at the same time. In 2014, he was appointed as the Head, Internal Audit and in 2018 posted Obed Hoyah: General Manager Retail Business. He holds a to Permanent Control as Head, in charge of Managerial Master of Science degree in Management from the University of Supervision & Business Continuity, Operational Risk, Branch PS Maryland University College (Graduate School of Management Control and KYC Quality Control. & Technology) in Maryland, USA and a Bachelor of Science degree in Accounting from Rhode Island College, Providence, Lawrence Ribeiro: Head, Logistics & Support. He holds RI, USA. Obed is a seasoned banker who has worked in different a Post Graduate Diploma in Legal Studies from the Ghana capacities in the bank, as Head of SME, Pre-Recoveries, and School of Law, Executive Master of Business Administration Credit & Operational Risk before taking on a role at Retail (Finance option) from the University of Ghana, Legon and Banking. He was the Project Manager for the RUBI Project, BSc Electrical/Electronic Engineering degree from the Kwame which transformed the structure of the network from an Nkrumah University of Science and Technology. In the last Operational organization to a Sales and Service outfit. He has seventeen years, he has built extensive experience in enterprise over 20 years of experience in the industry both in Ghana and IT management and service delivery. He is also experienced the USA, where he started his banking career. in Logistics and Estate management. He worked in various capacities as Head of Data Centre Operations, Head of Network Dorcas Quaye: Head Human Resource Management. She and System, Head of IT Security and Business Continuity holds a BA in Social Sciences from the Kwame Nkrumah Planning and Head of Information Systems and Technology. University of Science and Technology, and is a certified AML/ SANCTIONS and EMBARGO practitioner. She has over 30 Adwoa Asieduaa Ntirakwa: Head Organisation & Projects. years of rich and full rounded banking experience in branch She is a product of the University of Ghana Business School management, Retail and SME businesses, and Operational with a BSc in Banking and Finance Option and a Master of Risk management. As a branch manager, she managed three Business Administration (Project Management Option) from branches, and thereafter she was appointed as the Head of the Ghana Institute of Management and Public Administration. the SME Business Banking Unit. She was appointed the Head She is also a professionally qualified member of the Chartered of Compliance, AML & CFT when the unit was created in the Institute of Bankers (Ghana) and is a Lean Six Sigma trained – Bank in 2010. In October 2015, she was appointed as the Head

10 SOCIETE GENERALE GHANA PLC Key Management Personnel cont’d

Green Belt. She is also a coach in Prism Methodology and has turning these brands into profitable and successful businesses. trained a number of staff members on the Prism Methodology. A consummate professional, he has within the last decade Adwoa has 16 years’ experience in Banking in the areas of and a half worked within the Ghanaian banking industry and Retail Banking and Project Management. In her current role held senior executive roles in (UBA) as the Head of Organization and Projects, she is responsible Ghana Limited and Limited, responsible for for the Bank’s Project Management Portfolio and Methods/ Marketing, Corporate Communications and Service Quality. He Procedures, ensuring that Projects are delivered for the also worked at Barclays Bank Ghana Limited where he served Functional Teams in line with their Business strategy. as the Programme Manager for Brand and Name Change during the bank’s brand transition to Limited. Elikplim Muzzu: Head, Marketing Multichannels and Quality. He holds a Master’s Degree in International Affairs from the Mr Muzzu is a seasoned, multi-disciplinary marketing University of Ghana’s Legon Centre for International Affairs management, corporate communications and change and Diplomacy in addition to a Master’s Degree in Business management executive with over 22 years proven record of Administration from GIMPA. growing lasting brands and managing multi-million dollar projects across Ghana. With a passion for brands and a strong business judgement and interpersonal skills, he has successfully managed many client projects and developed many successful brands on the local market and in the process

SOCIETE GENERALE GHANA PLC 11 BOARD CHAIR’S STATEMENT

Distinguished shareholders on behalf of the Board of Directors and Management of Societe Generale Ghana PLC, I am pleased to welcome you to the 41st Annual General Meeting of our Bank and present to you for the first time in my capacity as Board Chair, the Audited Annual Report and Financial Statements for the financial year ended 31 December 2020.

Economic environment This year has been a challenging one generally for the global economy as a result of the global health crisis and its attendant ripple effects on many aspects of human existence. Many countries faced a multi-layered crisis comprising a health shock, domestic economic and financial disruptions, plummeting external demand, capital flow reversals, and a collapse in commodity prices. COVID- 19 pandemic. There is however much reason to be hopeful. Testing has been Following the lifting of restrictions and strong policy support, ramped up, treatments are improving, vaccines have been signs of recovery begun to emerge in the third quarter. approved and rolled out, and recent data shows that many Provisional data released by the Ghana Statistical Service economies have started to recover at a faster pace than earlier showed that real GDP growth contracted by 1.1 percent in anticipated. the third quarter of 2020 as compared to the 3.2 percent contraction recorded in the second quarter. The upward trend According to the IMF, global growth is expected to increase to is expected to continue. According to Fitch Research analysts, 5.5 percent in 2021 and 4.2 percent in 2022 after an estimated real GDP growth is expected to increase from an estimated 1.2 contraction of 3.5 percent in 2020. Global trade volumes, percent at the end of December 2020 to 4.5 percent in 2021, and consistent with recovery in global activity is also forecasted 4.3 percent in 2022 to grow about 8 percent in 2021, before moderating to 6 percent in 2022. Infation is also expected to remain subdued Infationary pressure, which mounted in April 2020 on account for the next two years. Global financial conditions have also of pandemic-related measures, started easing in August 2020 generally improved, characterized by a general increase in on the back of declining food prices, partly refecting effects investor confidence and expectation, rising risk asset prices, of seasonal factors. This resulted in an end of year infation of and an ongoing rebound of portfolio fows to emerging market 10.4 percent above the central bank’s target range of 8 +/-2. economies. Forecasts from Fitch Research point to an average infation rate of 8.7 percent in 2021 and 8.2 percent in 2022 The economic situation in Africa generally mirrors that of the world. GDP contracted by 2.1 percent this year, the continent’s Ghana’s provisional total public debt stock as at end of first recession in half a century. The pandemic shock and December 2020 stood at GH¢291,614 million, representing 76.1 ensuing economic crisis have had direct implications for percent of GDP, compared to GH¢217,991 million, equivalent budgetary balances and debt burdens. According to the African to 62.4 percent of GDP in 2019. One of the major components Development Bank, the average debt-to-GDP ratio for Africa is accounting for the increase in the public debt is the fiscal expected to climb by 10 to 15 percentage points in the short impact of Covid-19 expenses which amounted to GH¢19.7 to medium term. That means serious debt challenges might be billion in 2020. The country recorded an overall fiscal deficit of looming, and disorderly defaults and lengthy resolutions could 11.7 percent of GDP at the end of December 2020. This is mainly become a major obstacle to Africa’s progress toward prosperity attributed to revenue shortfall from weak economic activity and unanticipated increased health expenditure. The deficit Core infation (in food and energy prices) has also risen in was financed from both the domestic and external sources. many African countries. Significant currency depreciation has occurred, particularly in frontier market economies, partly as a The current account deficit narrowed because of reduced result of the disruptions in external financial fows—including demand for imports. According to the MPC press release in remittances, foreign direct investment, portfolio investment, January 2021, crude oil prices declined by 22.9 percent year- and official development assistance. In light of all these on-year in December 2020, driven mainly by weak demand. however, GDP is forecasted to grow at 3.4 percent in 2021. It Crude oil prices averaged US$50.2 per barrel, compared with is expected that countercyclical easy monetary policy and US$65.2 per barrel a year ago. In contrast, gold prices went up fiscal stimulus packages will support the continent’s economic by 25.4 percent to an average of US$1,857.2 per fine ounce, recovery. strongly supported by accommodative monetary policy, increased uncertainty, and the global economic slowdown due Operating environment to the pandemic. Cocoa prices averaged US$2,581.3 per tonne Ghana’s economy showed resilience after recording a strong in December 2020, up by 2.5 percent on a year-on-year basis. growth of 6.5 percent in 2019. In the first quarter of 2020, Real Ghana’s Gross International Reserves rose to $8,624 million GDP growth stood at 4.9 percent. However, this momentum at the end of December 2020 from $8,418 million recorded was significantly curtailed generally due to a slump in oil at the end of December 2019. The current level of reserves is prices and weakened global economic activity caused by the

12 SOCIETE GENERALE GHANA PLC Board Chair’s Statement cont’d

sufficient to provide cover for about 4.1 months of importation until 30 September 2020 when he stepped down as Chairman bills above the forecast cover of 4.0 months. The country’s after a Virtual Extra Ordinary General Meeting of the Bank. strong reserve position has resulted in stability in the foreign I would like to posthumously thank Mr Kofi Ampim for his exchange market despite capital fow reversals as a result of the exemplary leadership and direction of the Board. heightened global uncertainty The Bank of Ghana granted approval for the Board Chairperson The exchange rate between the Ghana cedi and US dollar on 15 September 2020 and Mrs Margaret Boateng Sekyere remained stable with volatility refecting seasonal import- assumed the Board Chair on 1 October 2020. driven demand. Increased public debt and shortfalls in domestic revenues pose challenges to further macroeconomic Corporate governance improvements. The cedi has cumulatively depreciated against Our Bank is committed to ensuring effective corporate the US Dollar and Euro by 3.9 percent and 12.1 percent governance and sound risk management, which are of respectively on a year to date basis. fundamental importance in banking business. The Companies Act, 2019 (Act 992); The Banks and Specialised Deposit Taking 2020 Operating results Institutions Act 2016 (Act 930); the Bank of Ghana’s Corporate The year has been a challenging one for the industry in Ghana Governance Directive 2018; the Securities Industry Act 2016 and globally. However the performance of the bank for 2020 (Act 292); the Securities and Exchange Commission the was encouraging given the global pandemic currently sweeping Corporate Governance Code for Listed Companies 2020; the through the country and world as a whole. The Profit After Tax of Securities and Exchange Regulations as well as the Continuing the bank for this year stood at GH¢ 154,208,915 and compared Listing Requirements of the provide us favorably to the 2019 performance of GH¢ 128,542,186. Some with the regulatory framework for ensuring effective corporate indicators worth mentioning are the Net Banking Income (7.8% governance, anti-money laundering and combating financing growth) , Operating expenses (6.0% growth)Total Assets (15.1% of terrorism. growth ) and Total Shareholders’ Funds(15.4% growth). All in all the bank remained resilient and recorded gains on most of its Outlook for the year 2021 notable indicators. The year 2020 saw very peaceful elections and the deepening of Ghana’s democracy. For the year 2021 we will continue to Share performance deepen our stakeholder relationships by liaising with our At the start of the year 2020 our share price was GH¢0.72. By customers, our communities and our regulators. We will the second half of 2020 the share price fell to GH¢0.60. The year continue to work in close liaison with the Bank of Ghana to 2020 saw our share price decrease to GH¢0.64 when compared strengthen our Regulatory Framework. to the beginning of the year performance.

Change of name to Societe Generale Ghana PLC Acknowledgement Shareholders by a special resolution granted approval on 20 On behalf of the Board of Directors, I wish to express my sincere July 2020 for the name of the company to be changed. The gratitude to all shareholders of Societe Generale Ghana for your Registrar of Companies granted approval on 23 November 2020 continued support and interest in the Bank I also extend my pursuant to Section 21(1)(b) of the Companies Act ,2019 (Act appreciation to the Management and staff of our Bank for their 992). The Bank of Ghana also approved the name change of the untiring efforts during a very difficult year. My gratitude goes Bank. to my colleagues on the Board, I wish to express my heartfelt gratitude to our cherished customers for their unfinching Changes in the Board of Directors support, loyalty and patronage. Together we are continuing Mr Kofi Ampim stepped down as Board Chairman in line with to build Societe Generale Ghana into the Preferred Banking the Bank of Ghana Corporate Governance Directive 2018 on Institution in Ghana. Thank you for your attention. 30 September 2020. The Board, management and Staff of Societe Generale Ghana PLC are deeply saddened by the death of Mr. Kofi Ampim ,the immediate past Board Chairman which occured on 30 January 2021. MARGARET BOATENG SEKYERE, From 1992 to 2003, for a period of 10 years, the late Mr Kofi BOARD CHAIR Ampim was the Ghana Country Representative for the Societe Generale Group.

Mr Kofi Ampim joined the Board of Directors of the Bank in March 2003 when the Societe Generale Group took over the controlling interest in the Bank Societe Generale Ghana PLC. At the 280th Board of Directors meeting of Societe Generale Ghana, held in La Defense Paris on 15 November 2012, the Directors of the Bank appointed the late Mr Kofi Ampim as the first Ghanaian Chairman of the Board a position he held and served faithfully

SOCIETE GENERALE GHANA PLC 13 MANAGING DIRECTOR’S REVIEW

I am pleased to share with you the progress and achievement made during 2020 and to share with you a review of our operations and the performance of your Company for the year 2020.

2020 Operating Results The economic terrain in the year 2020 was undulating not only for the banking sector but across all industries. The surge of the COVID 19 pandemic during the year led to a visible change in our banking operations and also had an impact on the various projections of growth and performance that had been made. Your bank SG Ghana surmounted all these obvious challenges and recorded a growth in profits of 20.0%. A major contributor to this sterling performance is the Net Cost of Risk which improved over the year by 39.3%.Treasury activities for Ghana on a sustained basis. the year also saw a significant improvement growing by 26.7%. Global Transaction Banking Department in 2020 was merged The deposit portfolio of the bank grew by 9.1%. The marginal into the Corporate Coverage Department to create a more growth was somewhat expected given the liquidity crunch due collaborative working relationship between relationship to the COVID 19 situation. The loan book of the bank however managers and product experts. The Department is thus now saw a decline of 3.1%. segmented as Global Corporates (Multinationals), Local Large Corporates, Public Sector Business, Commercial Banking, Review of operations for 2020 Business Banking and the Global Transaction Banking units. Human resources management The new structure will continue to facilitate adequate time for coaching and allow the various sector heads build the capacity The HR function in the year 2020 provided the needed support of their teams and affords them the opportunity to develop and for the workforce in the organization during the uncertain deepen their knowledge towards becoming experts in their pandemic environment. The various strategies that were put in respective sectors of operation whilst working closely with place to ensure continuity in employee productivity were: product experts. y Decongestion of the Head office to allow staff to work from The active participation in debt syndication and structured other branch locations; finance deals as well as the performance of lead arranger roles for these deals were with the support of our local and regional y Piloting of the ‘working from home’ concept for certain job structured finance teams. The securing of big ticket corporate roles; loan facilities helped grow the portfolio of the segment over the y Strict management of the Bank’s leave policy; year. The deliberate and conscious effort via capex financing and medium to long term loans to change the structure of the y The adoption of remote training activities such as asset book would continue to ensure marked reduction of the teleconferencing and the use of digital platforms. impact of the volatility of the short term loans on the total loan book Despite all these, the department rolled out the following: With the support of other stakeholders, the department y An internally developed HR Employee Self Service (ESS) worked hard to get SG Ghana affiliated to the Ghana.Gov/ tool to assist in the management of staff requests; UNIPASS payment platform and ensure the physical presence y The setup of a Mobility Committee to consciously see to of the bank at the strategic entry points of Ghana like Tema and the movement of employees across the organization to Takoradi ports, Kotoka International Airport, Afao and Paga. develop the quality of staff. The department also targeted customer acquisition as well as retention of major deposit generating clients and aggressive Corporate coverage department sale of our cash management and bill payment platforms. This move would be continued and reinforced with the coming into The Corporate Coverage Department underwent further full operation of YUP. reorganization and restructuring in 2020. The Middle Market Unit was further de-compartmentalized into two as Commercial The Corporate coverage department will continue to deploy Banking and Business Banking based on turnovers. This was to the Global Transaction Banking (GTB) experts, their products re align focus and targeted business development of the SME (Factoring, Cash management and Trade) and tools whilst portfolio. While the Commercial Banking unit is domiciled at the collaborating with Treasury teams in the sale and closure of head office, the Business Banking unit provides geographical Swaps, forwards, forex sales etc. The joint presentations to representation of corporate coverage in significant regions of customers and prospects would be intensified for maximum

14 SOCIETE GENERALE GHANA PLC Managing Directors Review cont’d

realization of the benefits of the value chain and cross selling 2. Network development – Opening of Lapaz Branch; strategy in order to be able to improve revenue in general and Closure of Tema Community One & Asafo Branches fees in particular. As part of the bank’s strategy to increase its presence in viable Retail banking markets, Lapaz Branch was opened in May 2020 to cater for The year 2020 began well with a lot of optimism, which was the banking needs of our clients and prospects in this vibrant quickly whittled away with the onset of Covid 19. Consequently, commercial and residential enclave. Similarly, as part of the the business shifted into a crisis management mode for the efficient deployment of our resources and branch network most part of the year to ensure that we manage the fallout in optimization, two branches, Tema Community One and Asafo order to protect and preserve the business we held prior to, were closed on 21 and 31 December, 2020 respectively. In line and to guard against any major setbacks by the time stability with this intent, customer accounts in Tema Community One is restored. And to a large extent we succeeded in doing that. and Asafo branches were transferred to Tema Community Two and Kumasi Central Branch (KCB) respectively as the account Despite the challenges, we succeeded in growing our deposit holding branches. stock appreciably, on a year-on-year basis in excess of 24%. This is due to the strategic forecasting up to the end of 2019, 3. Bancassurance unit: The Bancassurance unit was created where Retail decided to make deposit mobilization a key in March 2020 under Retail Business. The key objective of performance indicator for our teams, and therefore put in this unit is to increase the Bancassurance commissions place the necessary frameworks in terms of product focus and through product development, commercial and sales adjustments in objectives. On the asset side, we experienced leads. The unit is also responsible for developing and significant challenges as Covid severely impacted a number of managing insurance partnerships. This setup is meant to the institutions we deal with in a number of key sectors such as bring the necessary focus and expertise needed to drive tourism & hospitality, aviation, education, manufacturing and this line of business, which is a good source of commission certain service industries. We therefore had to suspend lending income. to almost 100 institutions, and worked on loan repayment moratoriums for a number of other institutions. A number of 4. Suspension of saturday banking: In the wake of the borrowers defaulted on their loans due to layoffs and other Covid-19 Pandemic, the bank suspended Saturday difficulties encountered during the course of the pandemic. In Banking in April 2020. This action was aimed at reducing spite of these challenges we were able to maintain our stock of face-to-face banking interaction during the pandemic. loans and even grew the book marginally in excess of 2%. Customers were advised to use the available digital In addition to the above results on the key business KPIs, other channels to access our services. significant projects and restructuring that Retail also embarked in the course of the year: 5. Dormant & inactive accounts management: We embarked on an exercise to clean up our account portfolio. 1. Market collections strategy/branch: This strategy is The goal of this exercise was to identify the various aimed at improving our deposit mobilisation, by setting up categories of inactive and dormant accounts and close or a new model designed to operate as a cash collection hub reactivate them in line with the Bank of Ghana guidelines for the Bank. The target customers are traders/businesses for managing dormant accounts. A bulk-account closure within the Makola market and its environs. The model will solution is being sought from SGABS (technical support be rolled out in Q1 2021. service) to enable us close all the accounts earmarked for closure. The proposed model includes: 6. KYC remediation & high risk KYC periodic review: In y A Branch - This branch will function as a normal branch on keeping with Bank of Ghana and SG Group regulations, its own. Retail Business invested time and effort remediating clients and also performing KYC Periodic Review for High y Cash Collection Centre – this will focus on the mobilization Risk clients. The high concentration on KYC remediation of deposits from customers on a daily basis. coupled with the Covid-19 pandemic affected our Retail y Retail Chinese Desk - this will focus on onboarding new sales performance especially the sale of loan products. Chinese clients and ensuring the banking needs of Chinese customers within the vicinity are met. Treasury and global markets y Yup Centre - the Centre will aim to promote the YUP brand Societe Generale Ghana operates a modern treasury that within the Makola market and its environs through a is focused on Trading/Markets and ALM activities. Treasury number of outlined activities. Sales also has a bouquet of products and services that provide efficient solutions to our customers’ needs. The team has a

SOCIETE GENERALE GHANA PLC 15 Managing Directors Review cont’d

high calibre of treasury professionals with diverse skills and 2020. experience. The Treasury Change Plan, currently underway Our enhanced compliance activities also focused on strong will further improve the Treasury offering and will result in ethical and regulatory standards, giving SG Ghana an overall more sophisticated solutions, efficiency and better pricing sound and solid image in risk management actions. to our customers, despite the challenges of the operating environment. Information technology Societe Generale Ghana has implemented a wide-range of IT SG Treasury remains poised to provide appropriate hedges and transformation plans aimed at accelerating the digital strategy solutions for its own balance sheet and that of its cherished of the SG Group by means of more open, agile and fexible IT customers. infrastructure thereby allowing the business to deliver its range of current and prospective services faster to clients. The Bank Organisation & projects has implemented some digital tools to facilitate access and Organization and Projects continues to play a strong role deepen financial inclusion in Ghana. These are the in managing and coordinating various projects that seek to promote efficiency in banking operations and improve y SG Mobile Branch - using technology to bring banking to customer experience. the doorstep of the customer. In the year under review the Bank upgraded its Core Baking y OpenApp: Remote onboarding at Client location – To System from Version 10 to 11 with improved architecture from facilitate product availability for the customer. Service Métiers Génériques (SMGs)/Application Programming

Interface (APIs) to allow other applications to better interact y DiGiT: Customer Self-Service – Balance enquiries, loan with the Core Banking System and enhance customer simulation, branch location search etc. to facilitate loan satisfaction. acquisition, feedback and complaints. The Bank also successfully completed the Instant Issuing Cards y SG Connect: Account to account transfer. Account to Wallet Project, the first among other African Subsidiaries. The instant and Bill payment. issuance of cards to customer has improved the turnaround time in delivering cards to customers. Marketing, multi-channel and quality review The Interoperability project when completed will allow our The Department in 2020 supported the business with the customers to move funds from their Bank Accounts to their research and development of new products, the review and Wallets and also allow the transfer of funds to other Banks implementation of updated pricing for the Corporate and seamlessly. Retail Business, and the running of product campaigns to support business strategy. Business was also supported with The year also saw the opening of the Lapaz branch, the advertising and commercial communication on products and successful relocation of the Airport Branch to a more services. advantageous location to improve visibility and service delivery to our customers. Plans are also underway for the opening To improve the customer experience mystery shopping and of our Derby Avenue Branch which will enhance deposit voice of the customer surveys were conducted to identify mobilisation and improve accessibility to our customers in and and address gaps using a continuous improvement model. A around the vicinity. centralized complaints desk ensured the efficient resolution of customer complaints. Operational risk and permanent control Operational Risk and the Permanent Control department The development of various data analysis measures has continue to play a critical role in deepening the risk culture in provided the business with monitoring tools, which are used the Bank. In 2020, Societe Generale Ghana launched a number for regular analysis and decision making. of innovative products and services to meet customers’ growing demands. Consequently, effective risk assessments were performed on these products and services to enhance Corporate social responsibility improvements in our business. The risk assessments focused Societe Generale Ghana supported the country during the Covid on key areas of prevention, detection and timely response to -19 pandemic with a total of GH¢ 1,216,667. This was made up minimize operational risks in the Bank. of a donation of GH¢ 500,000 to Covid 19 National Trust Fund. A donation of GH¢ 416,667 through the Ghana Association of Managerial Supervision Control activities, Business Continuity Bankers and the donation of two (2) ventilators worth GH¢ Plan focused mainly on the management of COVID-19 crisis, 300,000 to two (2) Hospitals. Business Impact Analysis, Risk Control Self-Assessment (RCSA), which identified all the risky activities of the Bank together with In addition, following the declaration of Covid-19 as a global Risk Awareness and Sensitization Exercise formed the bedrock pandemic by the World Health Organization (WHO), Societe in strengthening the internal control systems of the Bank in Generale Ghana put together a number of interventions to

16 SOCIETE GENERALE GHANA PLC Managing Directors Review cont’d

alleviate the unanticipated financial hardships created for its of the investments of the bank’s shareholders, clients and worst affected clients. partners. These interventions include the deferment of loan repayment The Compliance Department continues to play an essential for up to six months for qualified customers whose incomes and role in deepening the compliance culture in the Bank and cash fows are affected by the pandemic. A free COVID-19 Life ensuring adherence to Internal and external regulations. The Insurance Cover for all our customers, both new and existing, department will continue to focus on key compliance issues subscribing to our Sound Education and Sound Farewell within the scope of Financial Crime and Regulatory Compliance policies with sum assured of up to GH¢ 10,000 (With Prudential). Topics to meet its mandate within the existing framework of This is to safeguard customers by providing them with financial the bank. support in the unfortunate event of a diagnosis, hospitalization or death as a result the coronavirus. Additionally, in line with The future fee waiver announcement by the Ghana Bankers Association, With the stable political environment, our ambition is to we waived some charges on domestic funds transfers. continue the growth of our market share on credits, deposits, fows and market activities and position ourselves among the Compliance major players of the banking sector. The target is to grow our The Compliance Department of Societe Generale Ghana has credit market share to 7.5% by the end of 2022. The deposit remained pivotal in ensuring that, despite the ever changing target is to grow the bank’s deposit market share from 3.77% in trends in the industry, the Bank, its Stakeholders and Staff 2020 to 5.2% by end of 2022. To continue to grow our share of are continually guided and focused in ensuring regulatory market activities i.e. FX, Derivatives, Fixed Income trading from requirements, ethical standards and professional conduct our current ranking to a market ranking of 6th position by 2023. are maintained at high standards. SG Ghana’s offers as its reputation and as one of its unique selling points, a culture Appreciation which respects and offers continued adherence to local and Finally, I would like to end by thanking the Board of Directors, international regulations. Management and every member of staff for their individual and collective contribution to the organic growth of the Bank This assures our valued clients of the security of their during a very difficult year. investments and operations especially in these turbulent financial times. This also minimizes the risk of regulatory Hakim Ouzzani sanctions and guarantees the ease of business in the MANAGING DIRECTOR international markets, resulting in sustainability and growth

SOCIETE GENERALE GHANA PLC 17 SOCIETE GENERALE GHANA PLC REPORT OF THE DIRECTORS

The Directors in submitting to the shareholders the financial statements of the Bank for the year ended 31 December 2020 report as follows:-

2020 2019 GH¢ GH¢ The Bank recorded net profit before taxation 221,630,035 176,691,350 From which is deducted taxation of (67,421,120) (48,149,164)

Giving a net profit after taxation of 154,208,915 128,542,186 There was transfer to statutory reserves of (38,552,229) (64,271,093) Leaving a profit for the year after taxation and transfer to statutory reserves of 115,656,686 64,271,093

When added to the opening balance on the income surplus account as of 1 January of 66,161,749 30,256,311 From which is deducted final Dividend Paid of (31,911,361) (28,365,655)

It leaves a closing balance on the Income Surplus account of 149,907,074 66,161,749

Objective of the company and nature of business With change in ownership of the Company, the Bank in 2003 Societe Generale Ghana PLC is a public limited liability company indicated its intention to disinvest in SSBI in line with its policy incorporated under the Companies Act, 2019 (Act 992). and strategy, to liquidate SSBI and refocus on core business. The company which is a Bank is listed on the Ghana Stock The directors of SSBI at the time by a resolution dated 6 August Exchange and is registered with the Ghana Investment 2003 resolved that the entire portfolio of investments held by Promotion Centre. The Company is licenced by the Bank of SSBI be disposed off. Over time all the investments held by Ghana as a Universal Bank (Class 1 No 215) in Ghana under the the company were sold off. The proceeds of the sale of the Banks and Specialised Deposit Taking Institutions Act ,2016( investments were credited to Societe Generale Ghana PLC as Act 930). SSBI is 100% owned by the bank. SSBI has been inactive for a long time now since almost all of the investments which were Holding company held under it had been sold. The Societe Generale Group through its wholly owned In order to comply with Section 73 (3) of the Banks and investment subsidiary SG Financial Services Holding owns Specialized Deposit Taking Institutions Act, 2016 (Act 930) 60.22% of the issued capital of the Company, thus making which provides that a Bank or Specialized Deposit Taking Societe Generale Ghana PLC a subsidiary of the Societe institution shall not invest or hold investments in the share Generale Group. capital of a body corporate other than a subsidiary of that bank or specialized deposit taking institution that represents more Investments than 5% interest in the body corporate. SSB Investments Limited, a company incorporated in Ghana to manage the equity investments of the Bank is a wholly owned The Board of Directors of the Bank at a meeting held at subsidiary of the Company. The nature of the business which Yaoundé in Cameroun on 1 December, 2017 notice of which the company is authorized to carry on are: had been duly given, authorized the transfer of its 10% shares y To carry on the business of an investment company and in Advans Ghana Savings & Loans to SSBI. The certificate for for that purpose to acquire and hold either in the name the transfer of Shares to SSBI was obtained in 2018. To achieve of the company or in that of any nominee, shares, , full convergence with Act 930, the Bank is currently working debentures, bond notes and securities issues; on operationalizing SSBI to comply with IFRS and Regulatory Reporting. y To take over and manage all investments of the Bank; The Bank has therefore put in place processes to make SSBI y To do all such other things which may seem to the operational and functional in order to be able to use it as company’s directors to be incidental or conducive to the a vehicle to hold all its other investments that exceed the achievement of the objects. regulatory 5% threshold. On 4 November 2019, the re-registration process was completed

18 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

at the Registrar Generals Department and SSBI was issued with a being eligible; offers herself for re-election. Registration Number CS241862019; a Tax Identification Number C003107913X, a Certificate of Incorporation and a Certificate to Laurette Korkor Otchere: She is a Barrister at Law and a Deputy Commence Business. An application is pending with the Bank Director General Operations and Benefits at Social Security and of Ghana seeking their approval to fully operationalize SSBI. National Insurance Trust. She holds a Juris Doctor; a Bachelor of Arts in Economics and is a Certified Professional in Human Stated capital Resources (SHRM-CP). She is a member of the Ghana Bar, State The Bank has complied with the minimum stated capital of New Jersey Bar and the United States District Court, District requirement for universal banking as directed by the Bank of of New Jersey. She is an Adjunct Professor at Rutgers University Ghana. School of Management and Labour Relations and the Society for Human Resource Management. She has extensive working Changes in Board of Directors and Senior Management and professional experience internationally and locally. She joined the Board of Directors in July 2017 with Bank of Ghana Retirement of Directors granting approval on 6 September 2017. Mr Kofi Ampim retired as a Director of the Bank on 30 September 2020 pursuant to the Bank of Ghana Corporate Governance Election of Directors Directive December 2018. He passed on 30 January 2021 In accordance with Section 72(1) and 90 of the Constitution of the Bank, Mr Francis Awua-Kyerematen was appointed as an Appointment of Board Chair Independent Non Executive Director of the Bank and offers In line with the Bank of Ghana’s Corporate Governance Directive, himself for election. the Banking Supervision Department approved Mrs Margaret Boateng Sekyere as Board Chairperson on 15 September 2020 Changes in Senior Management and she assumed the Board Chair on 1 October 2020. y Mr Ernest Kuetche the Deputy Managing Director was re- assigned to SG in . Appointment of Non-Executive Director Mr Fosuhene Acheampong was nominated to the Board in y Mr Mohamed Fehri, the Chief Finance and Administrative April 2020 with Bank of Ghana granting approval of the said Officer was appointed as the SG West African Regional nomination on 3 June 2020. He is a chartered accountant by Chief Finance Officer. profession and holds an MBA in Finance from the Lagos State y Mr Cedric Chaux Head of Marketing was re-assigned to University and a Bsc in Accounting from the University of Lagos. the SG Head Office in Paris; He is currently the Director of Finance and Administration at the Cedar Seal Company Limited. y Mr Albert Ofori , Head Human resource was appointed as Governance Manager. Appointment of independent Non-Executive Director y was re-assigned to the Mr Francis Awua-Kyerematen is an Independent Non-Executive Ms Jerodine Bampoe Addo Corporate Banking Department Director. He is a Fellow of the Association of Chartered Certified Accountants. He holds a Master of Business Administration y Mr Nii Arday Wontumi resigned as the Head of the Legal from the University of Chicago Business School and a Bachelor Department. of Arts Honours Degree in Accounting and Finance from the Middlesex University London UK. He is the Principal Advisor The following appointments were made in 2020 : and Managing Director for Winchmore Capital. Mr Awua- y Mr Francois Pousse as the Deputy Managing Director; Kyerematen has worked as the Country Director for Citibank Ghana from 2008 to 2016; prior to moving to Ghana, he was y Mr Felix Adjaku as the Chief Finance Officer. with Citigroup in the London Office responsible for Debt Capital y Ms Abena Asare-Menako as the Acting Chief Compliance Markets – Middle East & African Desk from 2005. He also worked Officer. as a Senior Compliance Accountant for HM Revenue Customs in the UK from 1998 to 2003. He also spent a year with Grant y Mr Elikplim Muzzu as the Head of Marketing, Multichannel Thornton Ipswich Office UK as a Senior Corporate Finance and and Quality; and Recovery Associate from 1997 to 1998. Mr Awua-Kyerematen y Mrs Dorcas Quaye as the Head of Human Resource was nominated to the Board 14 December 2020 with Bank of Management. Ghana granting approval to the said nomination on 23 February 2021. All the said appointments were duly approved by the Bank of Ghana Re-election of Directors Mr Charles Tamma the Deputy Head of the Legal Department In accordance with Section 88 (1) of the Constitution of the was nominated by the Board of Directors as the Acting Head of Company, Mrs Laurette Korkor Otchere retires by rotation and the Department. The Company is seeking the prior approval

SOCIETE GENERALE GHANA PLC 19 Report of the Directors cont’d

of the Bank of Ghana pursuant to the Banks and Specialised consequences and impacts of its activities is a major focus of Deposit Taking Institutions Act 2016 (Act 930) which provides the Bank’s sustainable development policy. that a Bank or Specialised Deposit Taking Institutions shall not Based on continuous improvement, sustainable development appoint a person as a Key Management Personnel without the as interpreted by Societe Generale Ghana draws on best prior written approval of the Bank of Ghana. practices of the Societe Generale Group and the other economic sectors. The objective of the Bank is to better Directors’ interest understand, manage and improve its impacts on society and None of the Directors had a material interest in any contract of the environment, in conjunction with its stakeholders. significance with the Bank during the year. Societe Generale Ghana has established an Environmental and Social Management Systems (ESMS) General Guidelines. The Interest register ESMS General Principles stem from the legal and regulatory The Board of Directors duly approved a Confict of Interest framework applicable to the Bank’s activities. They are Policy. The Directors maintain an up-to-date register for implemented through processes and procedures adapted to the documenting and managing confict of interest situations in different activities of the Bank. The Guidelines outline the key the Company. During the year no interest was registered. standards and parameters enabling a responsible engagement of Societe Generale Ghana in all its activities. They may evolve Building the capacity of Directors in time, according to legislative or regulatory evolutions and The directors in an effort to build capacity to facilitate the as a result of the discussions between the Bank and its various discharge of their duties, underwent various forms of training stakeholders. The scope of these guidelines apply to banking during the year. The areas of training revolved around and financial services provided by Societe Generale Ghana. Corporate Governance and Capacity Building with the Ghana Societe Generale Ghana complies with the Environmental and National Banking College on 14 January 2021 and 21 January Social laws and regulations in force in Ghana and with the 2021. The Directors were also trained by the Chief Compliance applicable international Environmental and Social conventions Officer on Anti Money Laundering and Combatting Financing of and agreements. Societe Generale Ghana being part of the Terrorism in line with Bank of Ghana’s Corporate Governance Societe Generale Group adopts and respects the values and Directive 2018. principles enshrined in the following international conventions and agreements: Unclaimed dividend y the Universal Declaration of Human Rights and associated In accordance with the Companies Act 2019 (Act 992) any covenants (i.e. International Covenant on Civil and Political unclaimed Dividend for a period of 3 months will be transferred Rights and the International Covenant on Economic, into an interest bearing account. The unclaimed Dividend with Social and Cultural Rights); the accrued interest thereon will be transferred to the Registrar General after 12 months. y the main Conventions of the International Labour Organization; Bonus shares There has been no proposal for the issue of bonus shares during y the UNESCO Convention concerning the Protection of the the year under review. World Cultural and Natural Heritage;

Name change y the OECD Guidelines for Multinational Enterprises. The name of the company was changed to Societe Generale Ghana PLC in compliance with Section 21(1)(b) of the y the UNEP Finance Initiative; Companies Act ,2019 (Act 992). The name change was duly approved by the Bank of Ghana. y the UN Global Compact;

Policy on environmental and social management systems y the Equator Principles. The Bank has a Policy on Environmental and Social Management Systems, which was approved by the Board Legal and regulatory obligations and adoption of the above of Directors. It also has an Environmental and Social standards and initiatives entail that Societe Generale Ghana Management Systems Charter, which was duly approved by shall not knowingly finance transactions linked to certain the Board of Directors of the Bank. Societe Generale Ghana, goods and services defined in its policy. considers that the banking and financial sector is an essential contributor to the economic development. Fully aware of its Corporate Governance Directive by Bank of Ghana role in assisting the economic sphere, Societe Generale Ghana The Corporate Governance Directive 2018 issued by the Bank of is committed to conducting its activities in a responsible way. Ghana under the powers conferred by Sections 56 and 92 of the Taking into account the economic, environmental and social Banks and Specialised Deposit Taking Institutions Act ,2016 (Act

20 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

930)requires Regulated Financial Institutions to adopt sound y overall risk strategy, including its risk tolerance/appetite; corporate governance principles and best practices to enable them under take their licensed business in a sustainable manner; y policies for risk, risk management and compliance, to promote the interest of depositors and other stakeholders including anti-money laundering and combating the by enhancing corporate performance and accountability of the financing of terrorism risk; Regulated Financial Institutions; and to promote and maintain public trust and confidence in Regulated Financial Institutions y internal controls system; by prescribing sound corporate governance standards which are critical to the proper functioning of the banking sector and y corporate governance framework, principles and the economy as a whole. corporate values including a code of conduct y compensation system Sound corporate governance standards The Board of Directors of the Bank have overall responsibility for the Company including approving and overseeing the Duty of care and loyalty implementation of the strategic objectives, risk strategy, The members of the Board exercise a duty of care, duty of corporate governance and corporate values. The Board is loyalty and other duties of Directors to the Company all times responsible for appointing and providing oversight of Senior which is stipulated in the Companies Act ,2019(Act 992) and the Management. These responsibilities are set out in the formal Constitution of the Company. Charter of the Board. The updated Charter was duly approved by members on 2 December 2020. The Board ensures that a Corporate culture and values well-structured and rigorous selection system is in place for The Board has established a corporate culture and values for the the appointment of Key Management Personnel through the Company that promote and reinforces norms for responsible Recruitment Policy of the Bank and the Board validates the and ethical behaviour in terms of the Bank’s risk awareness, nominations of Key Management Personnel prior to submitting risk-taking and risk management. The Company has in place a same to the Bank of Ghana for approval. Code of Conduct; a Confict of Interest Policy, Code of Conduct on Anti Bribery and Corruption Policy duly approved by the Annual certification Board of Directors. In compliance with Bank of Ghana’s Corporate Governance To promote sound corporate culture in the Company, the Board Directive for certification within 90 days, at the beginning of has taken the lead and established the tone at the top by setting each financial year, the Board of Directors of the Company and adhering to corporate values for itself, key management certify general compliance with the Directive. The Board and employees that create expectations that business should further certifies that: be conducted in a legal and ethical manner at all times. The Board also ensures that appropriate steps are taken to i. the Board has independently assessed and documented communicate throughout the Company, the corporate values, the corporate governance process of the Bank and has professional standards it sets together with supporting policies generally achieved its objectives; and appropriate sanctions for unacceptable behaviours. ii. the Directors are aware of their responsibilities to the Bank as persons charged with governance. Related party transactions The Board ensures that transactions with related parties iii. the Board further confirms that it shall report any material including internal group transactions are reviewed to assess deficiencies and weaknesses that have been identified risk and are subject to appropriate restrictions by requiring in the course of the year along with action plans and that such transactions are conducted on non-preferential timetables for the corrective action by the Board to the terms basis and applicable legislation and other requirements Bank of Ghana. exposure limits for loans to related parties and staff. iv. the Board of Directors have received training by the Ghana Plan for succession National Banking College on Governance and Directors The Board has duly approved a succession plan and submitted Responsibilities for 2020. same to the Bank of Ghana for approval. The succession plan focuses on developing human resources to enable the Business strategy Company to retain a pool of qualified candidates who are ready The Board approves and monitors the overall business strategy to compete for key positions and areas when they become of the Bank taking into account long-term financial interest of vacant to ensure effective continuity of the Bank. the company, its exposure to risk and its ability to manage risk effectively. The Board approves and oversees the formulation and implementation of the:-

SOCIETE GENERALE GHANA PLC 21 Report of the Directors cont’d

Key management oversight b. be a director on the Board of an institutional shareholder The Board provides oversight of Senior Management as part of with significant equity interest in the Regulated Financial the Company’s checks and balances and Institution.

a. monitors and ensure the actions of Senior Management c. have more than 5% equity interest directly or indirectly in through reports from Management consistent with the the Company or in its related companies; strategy and policies approved by the Board, including the risk tolerance appetite and risk culture; d. be employed in an executive position in the Company or its related company at least 2 years prior to his appointment b. meets regularly with Senior Management through the date; Board sub committees; e. have relatives employed by the Company or any of its c. questions and reviews critically explanations and related companies as Key Management Personnel in the information provided by senior management; last two (2) years;

d. ensures that the knowledge and expertise of senior f. have engaged in any transaction within the last two (2) management remain appropriate given the nature of the years with the Company on terms that are less favourable business and the Bank’s risk profile. to the Company than those normally offered to other persons; or e. oversees the implementation of appropriate governance framework for the Company g. have served as a director in the Company continuously for more than two (2) terms unless the director can affirm that f. ensures that appropriate succession plans are in place for his/her independence is not impaired. senior management positions. h. be related to persons with significant shareholding g. oversees the design and operation of the Company’s in the Company or have any business or employment compensation system, monitors and reviews the system connections to a significant shareholder to ensure that it is aligned with the desired risk culture and risk appetite of the Company Board qualifications and composition Board members have the requisite qualification as Directors h. approves the overall internal control framework of the of a leading Financial Institution in Ghana listed on the Ghana Company and monitor its effectiveness Stock Exchange. The National Banking College have trained the Board of Directors on Corporate Governance. The Board were Separation of powers also trained internally on Compliance, Anti Money Laundering, There is a clear division of responsibilities at the top hierarchy Combatting Financing of Terrorism and Anti Bribery and of the Company. The positions of the Board Chair and the Corruption by the Chief Compliance Officer of the Bank. Managing Director are separate. The two top positions of Board The Board of Directors have a clear understanding of their Chair and Managing Director in the company are not both role in corporate governance and are able to exercise sound occupied by foreigners. The Chairman is a Ghanaian National and objective judgment about the affairs of the Company. and the Managing Director is a French National. Further no They possess, individually and collectively, appropriate two related persons occupy the positions of Board Chair and experience, competencies and personal qualities, including Managing Director of the Company. professionalism and integrity. The competencies of Boards are diverse to facilitate effective Independent Directors oversight of Management and shall cover a blend of Banking, The Board is in the process of ensuring and achieving Law, Finance, Accounting, Economics, Business Administration, convergence on the positions of Independent Directors. The financial analysis, Risk Management, Strategic planning and Board is in the process of on boarding one more Independent Corporate Governance.The Board collectively have reasonable Non-Executive Director who will chair the Risk Committee. The knowledge and understanding of local, regional and global final determination of the Independence of a Board of Director economic market forces as well as the legal and regulatory rests with the Bank of Ghana. However, the Board of Directors environment in which the Company operates. Ghanaian will ensure that an Independent director shall be non-executive nationals, ordinarily resident in Ghana, constitute at least 30% and shall not:- of the Board composition of the Company. a. hold cross directorship positions with another director on The Board of Directors are working assiduously to ensure the Board of other institutions that Independent Directors constitute at least 30% of the

22 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

composition of the Board. The Company does not have dissenting views can be expressed and discussed within the members serving on its Board that are Related Persons. decision-making process. The Chair encourages constructive relationship within the Board and between the Board and Board size and structure Management. She promotes checks and balances in the As at 31 December 2020 the Board members were 8 including governance structure of the Bank. She generally does not serve the Chairperson, the majority of which were non-executive and as a Chairman of any of the Board sub committees. The Bank ordinarily resident in Ghana. There is an appropriate balance of of Ghana approved the appointment of the Board Chair on 15 power and authority on the Board between the executive and September 2020. non-executive directors and no individual or group dominates the Board’s decision-making process. The Board Secretary The Board Secretary serves as an interface between the Board Directors’ appointments and Managing Director tenure and Management and supports the Chairman in ensuring The procedure for appointment of directors to the Board is the smooth functioning of the Board. The Board Secretary formal and transparent and conforms to the Directive issued advises the Board on matters relating to statutory duties of the by the Bank of Ghana on fit and proper persons. The Bank directors under the law, disclosure obligations, and company complies with the Bank of Ghana in respect of the tenure of the law regulations as well as on matters of corporate governance Managing Director of 12 years. requirements and effective Board processes. The Board Secretary ensures that directors are provided with complete, Appointment of key management personnel adequate and timely information prior to Board meetings. The Bank ensures that nominations are submitted to the Bank of Ghana before it appoints a Key Management Personnel with Board meetings an enhanced due diligence report on proposed nominees as The Company holds a minimum of four board meetings annually Key Management Personnel. The Bank also conducts police in February, April, July and December. It also has one Annual criminal background checks, obtains references from previous General Meeting. In compliance with the Bank of Ghana’s employers and 2 other reputable persons, notifies the Central Directive on Corporate Governance, the Board hereby discloses Bank about the recruitment of Key Management personnel and the total number of Board meetings and the attendance rate of obtains approval. each Director below which is above 50%:

Alternate Director The Bank does not currently have any alternate directors.

Board Chairman The Chair of the Board is an Independent Non-executive Director and is ordinarily resident in Ghana. The Chair provides leadership to the Board and ensures that Board decisions are taken on a sound and well-informed basis. The Chair encourages and promotes critical discussion and ensure that

NO NAME 19 FEB 22 APR 01 JUN 16 JUL 5 AUG 2 DEC ATTENDANCE 2020 2020 2020 2020 2020 2020 1 Margaret Sekyere yes yes yes yes yes yes 100% 2 Hakim Ouzzani yes yes yes yes yes yes 100% 3 Georges Wega yes yes yes yes yes yes 100% 4 Agnes T. Giraldi no yes yes yes yes yes 83% 5 Arnaud De Gaudemaris no yes yes yes yes yes 83% 6 Laurette Otchere no yes yes yes yes yes 83% 7 Martine Hitti no yes yes yes yes yes 83% 8 Fosuhene Acheampong n/a n/a n/a yes yes yes 100% 9 Francis Awua-Kyerematen n/a n/a n/a n/a n/a n/a n/a n/a - Applicable to Directors who were undergoing various stages of approval during the year

SOCIETE GENERALE GHANA PLC 23 Report of the Directors cont’d

The Board discusses the business affairs of the Bank through Financing of Terrorism (AML/CFT) policies, laws and reports submitted by management in writing as follows:- regulations; y a summary of financial statements and performance y list of related party exposures and their classification. review against the approved budget, business plan, peers and industry; Other engagements of Directors The Board is aware that to enable greater commitment to y the extent to which the bank is exposed to various risks Board matters, no director should hold more than five (5) such as credit, liquidity, interest rate, foreign exchange, directorship positions at a time in both financial and non- operational and other risks; financial companies (including off-shore engagements) subject y review of non-performing loans, related party transactions to the restriction against concurrent directorships in banks and credit concentration; under section 58(1)(e) of Act 930. Directors’ other engagements y activities of the Bank in the financial market and in its are disclosed below: “nostro” accounts; y effectiveness of internal control systems and human resource issues; y outstanding litigations and contingent liabilities; y compliance with Anti-Money Laundering/ Counter

Types and duties of outside board and management positions. Name Nationality Age Position Appointed Profession & Directorships Margaret Sekyere Ghanaian 59 Independent 2019 y Accountant

Hakim Ouzzani French 52 Executive 2016 y Banker y SSB Investments Ltd Lauretta Korkor Ghanaian 59 Non-executive 2017 y Deputy Director General Otchere SSNIT y Total Oil Co. Ltd y Barrister at Law y Human Resource Expert Agnes Tauty Giraldi French 55 Non-executive 2018 y Banker y SG Managing Director; Eu- rope, Africa, Structured Trade Receivables Finance Arnaud De French 45 Non-executive 2019 y Banker Gaudemaris y Director SG Martine Hitti French 64 Independent 2019 y Retired Georges Wega Cameroonian 51 Non-executive 2019 y Banker y Director SG Benin Fosuhene Ghanaian 57 Non-Executive 2020 y Accountant Acheampong y Director Cedar Seal Company Francis Awua- Ghanaian 52 Independent 2021 y Accountant-Winchmore Kyerematen Capital Ltd y Cenit Energy Limited y Council for Technical & Vocational Education and Training

24 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

Board Performance Evaluation y Relationship with Stakeholders: ensuring the board The Board carries out self-assessment of its performance for actively represents and engages with all stakeholders. individual Board members in order to review the effectiveness y Transparency and Disclosure: ensuring that the Board of its own governance practices and procedures .The board also maintains transparency in dealing with its stakeholders assesses Anti-Money Laundering and Combatting Financing of and meeting its regulatory disclosure requirements. Terrorism Training issues to determine where improvements may be needed and make any necessary changes. The Board The evaluation of SG Ghana’s Board considered applicable undertakes a formal and rigorous evaluation of its performance regulatory requirements. The process comprised of review of with external facilitation of the process every two (2) years. relevant SG Ghana documents; online survey of 2018 and 2019 Board members; one-on-one interviews with cross-section of Report on board evaluation Board members; benchmarking of the Board’s maturity against An in-house performance evaluation of the Board is conducted the External appraisers Board Maturity Framework. annually and a copy of the results submitted to the Bank of The findings revealed that on Transparency and Disclosure Ghana not later than 30 June of each year. the Board was advanced; The Board was considered to be A separate in-house performance evaluation of the Board on established in relation to the quality of the Board, its strategy, AML/CFT issues shall be submitted to the Bank of Ghana and Operations, Risk Management, and Relations with Stakeholders. the Financial Intelligence Centre for June and December each The board was however developing in terms of its Structure year before the end of the quarter following the evaluation and composition. An action plan was put in place to implement period. the recommendation of the external Board appraisal and the implementation rate is 82.75%. Implementation is ongoing to A statement on the external evaluation of the Board is included achieve 100% of the recommendations. in the annual report of the Bank. A detailed copy of the report was submitted to the Bank of Ghana. This will be undertaken The Securities and Exchange Commission Ghana (“SEC”) once every two years. Corporate Governance Code 2020 The SEC Ghana issued a Corporate Governance Code on 8 Statement on the external board evaluation October 2020. The Code applies to all companies whose An external Board evaluation was conducted on the Board securities are listed on the Ghana Stock Exchange (“GSE”). of Societe Generale Ghana to review the competence of the Societe Generale Ghana PLC a company that is listed on the collective Board and of individual members to ensure the GSE, has to comply with the Code by October 2021. With the Board has the right mix of skills, capabilities and experience to implementation of the Bank of Ghana Corporate Governance deliver the right outcomes, meet its responsibilities, explores Directive 2018, the Bank is already compliant with most of the strategies for improvement and decides on actions to be taken. sections of the SEC Code. However, the Board Charter will have The evaluation was done based on the quality of the Board and to be updated and published on the Banks website. The role consists of: and responsibilities of the Board as spelt out in the Code shall be described in a Board Charter. The Board appointments policy y ensuring the board is consisted of individuals of sufficient and remuneration policy shall also be in the Board Charter. calibre to run the institution. A majority of non-executive directors shall be independent. y Strategy: ensuring that the board collectively defines the The Board shall refect the company’s broad shareholding strategic direction and objectives for the firm and, that structure. The Board shall identify one independent non- the strategic direction of the firm is effectively cascaded executive director who shall be responsible for relations with downwards. minority shareholders. y Board Structure and Composition: ensuring that the No person shall hold more than 3 directorships in any listed board is composed of the right calibre of people (requisite company at any one time. All directors shall be required to knowledge and experience) to ensure effective and submit themselves for re-election. The Board shall adopt a independent oversight while minimizing confict of clear succession plan for its Chairman and Chief Executive interest. Officer and other senior executive officers. Independent y Board Operations: ensuring that the board performs its Non-Executive Directors shall be required to chair all Board oversight with respect to finance, strategy, risk and policy Committees. The Chairman of the Audit Committee shall be a formulation. Chartered Accountant. y Board Risk Management Activities: ensuring the board The Board shall appoint a person with responsibility for performs active monitoring and strengthening of internal relations with investors. This person shall have the resources audit, internal control, compliance and risk management necessary to fulfil his/her function. The investor relations functions. officer may have other duties. The investor relations officer

SOCIETE GENERALE GHANA PLC 25 Report of the Directors cont’d

shall be the first point of contact between investors and the Generale Code Book ‘A on Governance and Organisational company. He or she shall be responsible for providing financial Principles’ which was published for all entities under the group and non-financial information to investors, financial analysts in May 2020. and their representatives in a timely and accurate way. The investor relations officer shall also be responsible for reporting Senior management duties investor concerns to the Board and ensuring that the statutory Under the direction of the Board, Senior Management ensures - provisions as well as the provisions stipulated in SEC Corporate Governance Code, regarding communications with investors y that the activities of the Banking Institution are consistent and shareholders, are met. with the business strategy, risk tolerance/appetite and policies approved by the Board.

Board sub-committees y that it establishes a management structure that promotes The Board has in place an Audit & Accounts Committee, a Risk accountability and transparency Committee, a Nomination & Compensation Committee, a Cyber and Information Security Committee and an Independent y the implementation of appropriate systems for managing Directors Committee. risks both financial and non-financial to which the Bank The Chief Risk Officer, the Acting Chief Compliance Officer and is exposed. the Head of Internal Audit report directly to the Board via the Board sub committees and the Managing Director. y that they engage skilled and competent staff and provide training and development opportunities to sustain the Conflicts of interest delivery of short and long term business objectives, the The Board has in place a Confict of Interest Policy which risk management framework and protect the reputation includes: - of the Bank.

y the duty of the director to avoid possible activities that Risk management and internal controls could create conficts of interest; The Board ensures that the Bank has effective internal controls systems and a risk management function including a Chief y a review or approval process for directors to follow before Risk Officer with sufficient authority, stature, independence, they engage in certain activity so as to ensure that such activity will not create a confict of interest; resources and access to the Board.

y the duty of the director to disclose any matter that may Risk management function result, or has already resulted in a confict of interest; The Board has in place a risk management function responsible for: y the responsibility of the director to abstain from voting as prescribed and on any matter where the director may y identifying key risks to the Bank, have confict of interest; y assessing those risks and the Bank’s exposure to the y adequate procedures for transactions with related parties identified risks; to be made on a non-preferential basis; and the way in y monitoring the risk exposures and determining the which the Board will deal with any non-compliance with corresponding capital needs on an ongoing basis; the policy. y monitoring and assessing decisions to accept particular The Confict of Interest Policy was approved by the Board of risks, risk mitigation measures and if the risk decisions Directors. The Board maintains an up-to-date register for are in line with the Board approved risk tolerance/appetite documenting and managing confict of interest situations in and risk policy; the Company. y submitting risk management reports to Senior Management and the Board. Group structures The Board of SG Financial Services Holding Company shall have the ultimate responsibility for the adequate corporate Chief risk officer governance across the Group. The Board shall ensure that The Company has a Chief Risk Officer who is an independent there are governance policies and mechanisms appropriate to Key Management Personnel and who has no involvement in the the structure, business and risk of the group and its entities. operations of the bank with distinct responsibility for the risk The Board of Directors in addition to the Bank of Ghana management function and the comprehensive risk management Corporate Governance Directive of December 2018 utilizes the framework of the bank across the entire organization. The SG Group Corporate Governance Principles Instruction 01422 independence of the Chief Risk Officer is distinct from other VI EN applicable to Group entities as at 2018 and the Societe executive functions and business line responsibilities. The

26 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

Chief Risk Officer reports to the Board via the Risk Committee is done based on both the economic and operating environment with a functional report line to the Managing Director. He has of the subsidiary and on potential stress of the parent bank unfettered reporting access to Board and its Risk committee. or Financial Holding Company. The results of stress tests and Interaction between the Board Risk Committee and the Chief other risk management reports shall be communicated to the Risk Officer is regular and comprehensively documented. Board and Senior Management.

Internal controls Internal and External Audit Functions Internal controls within the Bank are designed to ensure that The Board and Senior Management effectively utilize the work each key risk has a policy, process or other measure, as well as conducted by the internal audit functions, external auditors a control to ensure that such policy, process or other measure and internal control functions. The Board recognizes and is being applied and works as intended. Internal controls help acknowledges that independent, competent and qualified provide comfort that financial and management information internal and external auditors, as well as other internal control is reliable, timely and complete and that the Bank is in functions, are vital to the corporate governance process and compliance with its various obligations, including applicable engage the auditors to judge the effectiveness of the risk laws and regulations. management function and the compliance function.

Head internal audit Compensation system The Bank has a Head, Internal Audit who is an independent Key Where share options are adopted as part of executive Management Personnel and has no involvement in the audited remuneration or compensation, it shall be tied to performance activities and business line responsibilities of the Bank. The and subject to shareholders’ approval at an annual general Head Internal Audit is competent to examine all areas in which meeting. The Bank has disclosed in the details, the number of the Bank operates and: shares held by the top 20 Shareholders. y has the professional competence to collect and analyze The Bank’s corporate structure financial information as well as evaluate audit evidence The Board and Senior Management understand the structure and to communicate with the stakeholders of the internal and the organization of the group and the Bank. The Board audit function; possess sufficient knowledge of auditing actively oversees the design and operation of the compensation techniques and methodologies; system. The Board monitors and reviews the compensation system to ensure that it is effectively aligned to ensure y is a member of a relevant recognized professional body; y prudent risk taking; The Head of Internal Audit reports to the Board sub-committee on audit and has direct access to the Board and its audit y levels of remuneration are sufficient to attract, retain committee. Interaction between the Board Audit Committee and motivate executive officers of the bank and this is and the Internal Audit is regular and comprehensively balanced against the interest of the bank in not paying documented. excessive remuneration;

Group-wide and bank-wide risk management y where remuneration is tied to performance, it shall be Risks in the Bank are identified and monitored on an on-going designed in such a way as to prevent excessive risk taking; group-wide and bank-wide basis. The sophistication of the risk management and internal control infrastructure - including, Executive directors are not entitled to sitting allowances and in particular, a sufficiently robust information technology directors’ fees; Non-executive directors’ remuneration shall be infrastructure keeps pace with developments. limited to directors’ fees and sitting allowances for Board and Committee meetings are not performance related. Risk management in subsidiary Banks The Board and Senior Management of parent banks or financial Disclosure and Transparency holding companies conducts strategic, group-wide risk The bank has submitted a list of its significant shareholders, management and prescribe group risk policies. The Board and directors and Key Management personnel as at 31 of December Senior Management of the Bank make appropriate input into to the Bank of Ghana by 15 January of the following year. Below the group-wide risk management policies and assessments of is the Corporate Structure of the Bank. local risks. Adequate stress-testing of the subsidiary portfolios

SOCIETE GENERALE GHANA PLC 27 CORPORATE STRUCTURE

SHAREHOLDERS

Cyber and Information Nomination & Compensation Security Committee Committee Board of Directors Audit & Accounts Committee Independent Directors Risk Committee Committee

Executive Committee Chief Risk Officer Managing Director Audit Kwame ANTERKYI Hakim OUZZANI Frank LAWOE Assets and Liabilities Committee

Executive Assistant Chief Compliance Officer Anna MENSAH Abena ASARE-MENAKO (Designate)

Company Secretary Adviser to MD Angela N. BONSU (Vacant)

Human Resource Management Purchasing Dorcas QUAYE Samuel AKOTO

Chief Finance Officer Felix ADJAKU

Deputy Managing Director Chief Operating Officer Francois POUSSE Bernice ALLOTEY

Corporate Coverage Treasury Organisation and Projects Central Back Office Fred OBOSU Catherine JOHNSON Adwoa Asieduaa NTIRAKWA Connor GWIRA

Structured Finance Retail Business Information Systems Technology Cards Business Edward ABOAGYE Obed HOYAH Abigail ALLOTEY (Vacant)

KYC Marketing, Multi Channel & Quality Cyber Information Security Officer Logistics Lydia DANKWAH Elikplim MUZZU Francis Amanor TEYE Lawrence RIBEIRO

Security Baba Mubarak AHMADU

28 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

Ethics and professionalism y define and follow up the implementation of the Bank’s The Bank has in place a Code of Conduct which was duly strategic orientations while making sure its business is approved by the Board of Directors. The Code of Conduct developing in the proper conditions of security; has been made available to the Board of Directors and all Employees. The Code shall be reviewed regularly and when y check and approve management by relying on the work of necessary. It contains practices necessary to maintain the reporting committees from which it regularly receives confidence in the integrity of the Bank and commit the Bank, information and to which it may assign tasks where its staff, management and the Board to the highest standards necessary of professional behaviour, business conduct and sustainable banking practices. It has been approved by the Board and y appoint, according to applicable local rules, the Bank’s signed off by employees that they understand the code and sanctions for breaching the policy. Representatives who shall manage the Bank, y Cooling-off period make sure the information given to the banking and market The Bank will respect the Cooling Off period under the Bank of authorities and to shareholders is reliable. Therefore, it Ghana Corporate Governance Directive 2018 which stipulates draws up the financial statements then presents them to that former Bank of Ghana officers, directors or senior the shareholders’ meeting for approval. executives shall not be eligible for appointment as a director of the Bank until after a period of two (2) years following the y it must assess the way it operates annually. expiration or termination of their contract of employment or service from the Bank of Ghana. A practicing audit professional There are five reporting Committees responsible for supporting or partner who is rendering services or had rendered auditing the Board of Directors, which are the Risk Committee; the services in the banking industry shall not be appointed as a Audit and Accounts Committee; and the Nomination and director of the bank until one (1) year has elapsed since last Compensation Committee; the Cyber and Information Security engagement with any Bank by that person. Committee and Independent Directors Committee.

A code of ethics for all company employees Independence of the Board of Directors. Societe Generale Ghana has a Code of Ethics for staff and this The Bank is committed to achieving the highest standards has been made available to all employees of the Bank. of corporate governance, corporate responsibility and risk management when conducting its business. The Bank ensures Code of ethics for the board and waivers to the ethics code The Regulations of the Bank provides for ethics for the Board that it conducts its business activities in accordance with all and provides that the Directors stand in a fiduciary relationship laws and regulations, which govern its business activities. The towards the Company in any transaction with it or on its behalf. Board of Directors are responsible for ensuring that Societe A Director shall act at all times in what he or she believes to Generale Ghana achieves and maintains a high standard of be in the best interests of the Company as a whole so as to corporate governance and practices. preserve its assets, further its business, and promote the The Bank has an eight-member Board comprising one executive purposes for which it was formed, and in such manner as a director; two Independent Directors and five non-executive faithful, diligent, careful and ordinarily skilful Director would directors. The Board consists of highly qualified individuals with act in the circumstances. In considering whether a particular transaction or course of action is in the best interests of the diverse professional experiences: The core role of the Board is Company as a whole a Director may have regard to the interests to promote the success of the Bank by providing direction and of the employees, as well as the members, of the Company, supervision in the Bank’s affairs. Among other roles, the Board: and, when appointed by, or as representative of, a special class of members, employees, or creditors may give special, but not y provides leadership to the Bank within a framework of exclusive, consideration to the interests of that class. prudent and effective controls which enable risks to be assessed and managed; Performance evaluation process. The Board has in place an evaluation process which covers y provides input into the development of the long-term the functions of the Board; Board meetings management objectives and overall commercial strategy for the Bank and procedures; Appointment, Induction, Training and and is responsible for the oversight of the Bank’s operations Development; Succession and Removal; Board Structure; while evaluating and directing the implementation of the Information and Communication. An evaluation was Bank’s controls and procedures; undertaken during the Reporting Period. y provides oversight of the Bank’s strategic aims, ensuring Role and functions of the Board of Directors and committees that the necessary financial and human resources are of the Board. in place for the Bank to meet its objectives, as well as The main task of the Board of Directors is to make sure that reviewing management performance; the Bank’s operations comply with the relevant applicable regulations and with the strategy defined. In this capacity, it y upholds the Bank’s values and standards and ensures that must: its obligations to its shareholders and other stakeholders are understood and met; and

SOCIETE GENERALE GHANA PLC 29 Report of the Directors cont’d

y ensures timely and accurate financial reporting to that have been prepared by management with oversight of the shareholders. Board of Directors. They further explain to the Board that the audit of the financial statements does not relieve management Remuneration and other benefits of Directors or the Board of their responsibilities. The auditors draw the Section 185(1) of the Companies Act ,2019 (Act 992) provides Board’s attention to any matters identified during the audit that the fees and other remuneration including remuneration of the financial statements of the company. The auditors payable to the directors in whatsoever capacity shall be obtain Management’s Responses to any matter(s) and draw determined from time to time by ordinary resolution of the the Board’s attention to any areas of concern. At the meeting company and not by any provisions in an agreement. Section the External Auditors Report on the Financial Statements, 78(3) of the Regulations of the Company provides that fees the Directors Responsibility for the Financial Statement, the payable to Directors shall not be increased except pursuant Auditors Responsibility, Opinion and Report on other legal and to an ordinary resolution passed at a General Meeting, where regulatory requirements. notice of the proposed increase has been given in the Notice convening the meeting. Collectively, the Directors at the Board Duration of current auditors meeting preceding the Annual General Meeting agree their fees Messrs Ernst & Young were appointed as Auditors of Societe and this is then placed before the Shareholders of the Bank Generale Ghana PLC on 31 March 2017 during the Bank’s through an ordinary resolution at the Annual General Meeting. Annual General Meeting. Thus, they are in their fifth year of providing auditing services to the bank. They were appointed Checks and balances mechanisms balancing the power of in accordance with Section 134(5) of the Companies Code, the CEO with the power of the Board. 1963 (Act 179) as amended, which has now been repealed and The Constitution of the Company provide that the Board of replaced with the Companies Act, 2019 (Act 992) and Section Directors may from time to time appoint one of their body 54(2) (d) of the Regulations of the Bank. to the office of Managing Director. The person shall be the Chief Executive, for such period and on such terms as may be Auditors’ involvement in non-audit work and the fees paid determined and, subject to the terms of any agreement entered to the auditors into in any particular case, may revoke such appointment and Apart from the audit assignment, Ernst and Young were not such appointment shall be automatically determined if the engaged by the bank to undertake any non-audit work during holder of the office ceases from any cause to be a Director. the year. Subject to any directives of the Board on matters of general policy, the Managing Director shall be responsible for the Auditors remuneration directions of the day-to-day business of the Bank and for its In accordance with Section 140 of the Companies Act, 2019 (Act administration. 992) Messrs.’ Ernst & Young the Company’s auditors have agreed to continue in office as the Bank’s auditors. A Resolution to If the Managing Director is absent from Ghana or is otherwise authorize the Directors to determine their remuneration for the incapacitated from performing duties of the office, the Board year ended 31 December 2020 will be proposed at the Annual may authorise an employee of the Bank to exercise, for the time General Meeting. being, all the duties and powers of the Managing Director. The Directors may entrust to and confer upon a Managing Stated capital of the bank Director any of the powers exercisable by them upon such terms The stated capital of the Bank is GH¢ 404,245,427 and with such restrictions as they think fit. Either collaterally with, or to the exclusion of, their own powers and subject to Substantial shareholders the terms of any agreement entered into in any particular case, Details of the Bank’s twenty largest shareholders are disclosed may from time to time revoke or vary all or any of such powers. in note 43 to the financial statements. Process for appointment of external auditors Section 81 of the Banks and Specialized Deposit Taking Risk committee Institutions Act, 2016 (Act 930) vests the shareholders of a bank In line with its Corporate Governance principles, the Board with the power to appoint the external auditors at an Annual of Directors has a Risk Committee made up of the following General Meeting and be approved by the Bank of Ghana in the directors: manner and on the terms as may be described. 1. Hakim Ouzzani 2. Margaret Boateng Sekyere Process for interaction with external auditors The Board of Directors on an annual basis invite the external 3. Georges Wega auditors of the company to a meeting for an Independent 4. Agnes Tauty Giraldi Auditors Report on the Audited Financial Statements of the 5. Laurette Otchere Company. The external auditors of the company explain to the Board the completion of the audit on the company which 6. Fosuhene Acheampong is undertaken in accordance with international standards. Mrs Margaret Boateng Sekyere will step down as a member of They usually state that the audit is conducted to enable the the Risk Committee once an Indpendent Non Executive Director external auditors form an opinion on the financial statements is appointed to Chair the Risk Committee.

30 SOCIETE GENERALE GHANA PLC Report of the Directors cont’d

The Risk Committee has the following functions. It work of the External Auditors y analyses on a periodical basis the organisation and y periodically gives an opinion of the organisation and functioning of the Bank’s risks departments. functioning of the Bank’s periodic and permanent internal control. Suggests to the Board of Directors the relevant y reviews the portfolio of credit and market risks to which adaptations, monitors the implementation of these the Bank is exposed. measures and reports on their application to the Board of Directors. As regards counterparty risks, the Risk Committee shall review y the following:- validates, in consultation with the Groups relevant Departments the Audit Plan of the Bank while making sure y the content of and changes to the portfolio per type that the development method enables the areas of risk to of facility and debtor, be properly detected and covered. y the regulatory ratios and key indicators, y follows up the implementation of the Audit Plan and proposes adjustments if necessary. y changes to the quality of commitments: sensitive, irregular, non-performing files, y reviews the work done by Periodic and Permanent Control: y reports to the Board of Directors on any anomalies y compliance with the conditional authorizations and gives its opinion of the relevance of the corrective issued by the Societe Generale, etc. measures chosen by the Bank’s Management, y adequacy of the level of provision for the risks y Monitors the implementation, according to the deadlines incurred, set, of the critical periodic control recommendations as well as the solving of the critical points identified, y the efficiency of debt collection, y informs the Board of Directors of any discrepancies in the y reports to the Board of Directors on its work. critical and priority corrective measures (failures exposing the entity to a high risk) The Committee reports its findings to the Board of Directors y reviews the procedures and the functioning of the anti- with the requisite recommendations. In attendance at Risk money laundering and terrorism financing systems, and Committee meetings are the Deputy Managing Director, Chief the compliance risk control. Operating Officer, Chief Risk Officer; Head of Audit Department; Chief Finance Officer; General Manager Corporate Coverage; the y submits to the Board of Directors the measures likely to Chief Compliance Officer; and the Head of Permanent Control. improve, where applicable, the security of operations, and The Risk Committee operates under a Charter. monitors the implementation of the selected measures. y is generally informed by Management of any event Audit and accounts committee occurring in the operation of the Bank which is likely to In line with its Corporate Governance principles, the Board of adversely affect its control of risks. Directors has an Audit and Accounts Committee made up of the following non-executive directors: The list of issues to be addressed at the Audit and Accounts Committee meetings are formalised in the Audit and Accounts 1. Arnaud De Gaudemaris Committee File; comprising Periodic Control Reports; 2. Martine Hitti Permanent Control Reports, Compliance Reports, Anti Money Laundering and Combatting Financing of Terrorism Reports to 3. Laurette Otchere the Audit and Accounts Committee and discussed according to 4. Fosuhene Acheampong the Agenda. This Committee reviews and makes recommendations to Nomination and compensation committee the Board on all aspects of the audit and financial reporting In line with its Corporate Governance principles the Board of processes. In attendance at Audit and Accounts Committee Directors has a Nomination and Compensation committee meetings are the Managing Director, Deputy Managing Director, made up of the following directors: Chief Operating Officer, Head of Audit Department, Head of Permanent Control Department and where necessary, the 1. Laurette Otchere Bank’s External Auditors. 2. Hakim Ouzzani The audit and accounts committee: 3. Georges Wega y Keeps up-to-date with changes in the legal and regulatory 4. Margaret Boateng Sekyere environment affecting the work the committee monitors for proper execution. This Committee ensures the bank has a board of competent and effective composition and is adequately charged to carry y Reviews and validates the accounts of the bank and the out its responsibility in the best interest of the bank and its

SOCIETE GENERALE GHANA PLC 31 Report of the Directors cont’d

shareholders. Compliance with securities and exchange commission regulations The following are the elements that may come under its scope and authority:- The Bank has complied with the regulations of the Securities and Exchange Commission (L.I. 1728 Regulation 61) and has y The Bank’s general wage policy submitted to the Commission as requested, two (2) reports of y The detailed salaries of the Bank’s senior executives and the Audit and Accounts Committee for the year 2020. The Audit Key Management Personnel Committee held three meetings during the year under review. In fulfilment of the Securities and Exchange Commission y Changes in social liabilities and Health Insurance for Staff requirements, we present a summary of the reports so submitted: y Administrators and Company Managers pay. y Report on Periodic Control, Permanent Control; The Nomination & Compensation Committee does not Compliance; Credit Risk, Operational Risk, and Market however have authority to make decisions on these issues and Risk Activities has a purely advisory capacity; therefore, it may only formulate opinions and recommendations to the Board of Directors. y Report on Structural Risks and Statutory Ratios Cyber and information security committee y Report on Bank of Ghana’s Prudential Ratios In line with its Corporate Governance principles and Bank y of Ghana’s Directive, the Board of Directors has a Cyber and Report on an overview of the Audit Department and its Information Security Committee made up of the following functions directors: y Report on Compliance Monitoring, Anti Money Laundering 1. Martine Hitti and Permanent Supervision ensuring continuous monitoring of operational activities. 2. Hakim Ouzzani y Report on Counterparty Risks 3. Fosuhene Acheampong y Report on Changes in Organisational Structure y Report on Business Continuity Plan Independent directors committee In line with its Corporate Governance principles, the Board y Audit Reports on Branches submitted. of Directors has an Independent Directors Committee. The purpose of the Committee is to determine the remuneration of y Report on Managing Confict of Interest within the Bank Executive Directors. The Committee is made up of the following The External Auditors submitted their audit plan for the year Directors:- and concluded that the audit approach will be risk based and control focused and that the audit will be in accordance with 1. Margaret Boateng Sekyere International Standards on Auditing. 2. Martine Hitti

By order of the Board

…………………………………...... …………………………………...... Board Chair Managing Director (Margaret Boateng Sekyere) (Hakim Ouzzani) ACCRA ACCRA 22 April, 2021 22 April, 2021

32 SOCIETE GENERALE GHANA PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The directors are responsible for preparing financial statements The Directors are responsible for ensuring that the company for each financial period, which give a true and fair view of the keeps accounting records which disclose with reasonable state of affairs of the bank at the end of the period and of the accuracy the financial position of the company and which profit or loss of the bank for that period. In preparing those enable them to ensure that the financial statements comply financial statements, the directors are required to: with the Companies Act 2019 (Act 992) and the Bank and Specialized Deposit Taking Institutions Act, 2016 (Act 930) y Select suitable accounting policies and then apply them and International Financial Reporting Standards. They are consistently. responsible for safeguarding the assets of the bank and hence y Make judgments and estimates that are reasonable and for taking steps for the prevention and detection of fraud and prudent other irregularities. y State whether applicable accounting standards have been The above statement should be read in conjunction with the followed subject to any material departures, disclosed statement of the auditors’ responsibilities on page 36, which and explained in the financial statements is made with a view to distinguishing, for shareholders, the respective responsibilities of the Directors and the Auditors in y Prepare the financial statements on a going concern basis relation to the financial statements unless it is inappropriate to presume that the company will continue in business

SOCIETE GENERALE GHANA PLC 33 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF SOCIETE GENERALE GHANA PLC

Ernst & Young Chartered Accountants Tel: +233 302 779868 / 4275 / 9223 / 2091 G15, White Avenue Fax: +233 302 778894 / 2934 Airport Residential Area ey.com P. O. Box KA 16009, Airport Accra, Ghana

Opinion to our audit of the financial statements of Societe Generale We have audited the financial statements of Societe Generale Ghana Plc in Ghana, and we have fulfilled our other ethical Ghana Plc (the Bank) set out on pages 40 to 98, which comprise responsibilities in accordance with these requirements and the statement of financial position as at 31 December 2020, the the IESBA Code. We believe that the audit evidence we have statement of profit or loss and other comprehensive income, obtained is sufficient and appropriate to provide a basis for our the statement of changes in equity and the statement of opinion. cash fows for the year then ended, and notes to the financial statements, including a summary of significant accounting Key audit matters policies. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the In our opinion, the financial statements present fairly, in all financial statements of the current period. These matters were material respects, the financial position of the Bank as at 31 addressed in the context of our audit of the financial statements December 2020, and its financial performance and cash fows as a whole, and in forming our opinion thereon, and we do not for the year then ended in accordance with International provide a separate opinion on these matters. For each matter Financial Reporting Standards and in the manner required below, our description of how our audit addressed the matter by the Companies Act, 2019 (Act 992) and the Banks and is provided in that context. Specialized Deposit -Taking Institutions Act, 2016 (Act 930). We have fulfilled the responsibilities described in the Auditors’ Responsibilities for the Audit of the Financial Statements Basis for opinion section of our report, including in relation to these matters. We conducted our audit in accordance with International Accordingly, our audit included the performance of procedures Standards on Auditing (ISAs). Our responsibilities under those designed to respond to our assessment of the risks of material standards are further described in the Auditors’ Responsibilities misstatement of the financial statements. The results of our for the Audit of the Financial Statements section of our report. audit procedures, including the procedures performed to We are independent of the Bank in accordance with the with address the matters below, provide the basis for our audit the International Code of Ethics for Professional Accountants opinion on the accompanying financial statements. (including International Independence Standards) (IESBA Code) together with the ethical requirements that are relevant

34 SOCIETE GENERALE GHANA PLC Ernst & Young Chartered Accountants Tel: +233 302 779868 / 4275 / 9223 / 2091 G15, White Avenue Fax: +233 302 778894 / 2934 Airport Residential Area ey.com P. O. Box KA 16009, Airport Accra, Ghana

Independent Auditor’s Report cont’d

Key audit matter How our audit addressed the key audit matter Allowance for expected credit losses on loans and advances to customers

IFRS 9 introduced a forward-looking Expected Credit Loss We have obtained an understanding of the Bank’s (ECL) model. implementation process of IFRS 9, including understanding of the changes to the Bank’s IT systems, The ECL model is to refect the general pattern of processes and controls. Additionally, we obtained an deterioration or improvement in the credit quality of understanding of the credit risk modelling methodology. financial instruments. We validated and tested the ECL model of the Bank by The amount of ECL’s recognized as a loss allowance or assessing the data integrity and the internal controls provision depends on the extent of credit deterioration around the model. since the initial recognition and recognition of impairment could be done on a 12-month expected credit We have also performed, among others, the following losses or Lifetime expected credit losses. Impairment substantive audit procedures: computations under IFRS 9 therefore involves the use of y Reviewed the accounting policies and framework models that takes into account: methodology developed by the Bank in order to assess its compliance with IFRS 9; y The probability-weighted outcome. y Verified sampled underlying contracts of financial assets to determine the appropriateness of y Reasonable and supportable information that is management’s classification and measurement of available without undue cost or Loan loss provision these instruments in the ECL model is a key area of judgement for management. Significant judgements in the determination of the y Reviewed and tested the methodology developed Bank’s Expected Credit Loss includes: to calculate loan loss provision under IFRS 9, concentrating on aspects such as factors for y Use of assumptions in determining ECL modelling determining a ‘significant increase in credit risk’, parameters. staging of loans, testing specific models related to y portfolio segmentation for ECL computation Probability of Default (PD), Loss Given Default (LGD), Exposure at Default (EAD) y Determination of a significant increase credit risk and y Tested the accuracy and completeness of data used in modelling the risk parameter, Recalculating the y Determination of associations between ECL, macroeconomic scenarios. y Reviewed forward looking information / multiple The use of different models and assumptions can economic scenario elements significantly affect the level of allowance for expected credit losses on loans and advances to customers. Due y For stage 3 exposures, we tested the reasonableness to the significance of such loans which account for about of the assumptions underlying the impairment 50.12% of total assets of the bank, and the significant identification and quantification including forecasts use of judgements, the assessment of the allowance for of future cash flows, valuation of underlying expected credit losses is a key audit matter. collateral, estimated period of realisation for collaterals, etc. The information on expected credit losses on loans and advances to customers is provided in Note20e ‘’Analysis y We have also analysed information relating to the of impairment allowances’’ of the financial statements. allowance for expected credit losses on loans and advances to customers disclosed in the notes to the financial statements of the Bank.

SOCIETE GENERALE GHANA PLC 35 Ernst & Young Chartered Accountants Tel: +233 302 779868 / 4275 / 9223 / 2091 G15, White Avenue Fax: +233 302 778894 / 2934 Airport Residential Area ey.com P. O. Box KA 16009, Airport Accra, Ghana

Independent Auditor’s Report cont’d

Other information As part of an audit in accordance with ISAs, we exercise The Directors are responsible for the other information. The professional judgement and maintain professional scepticism other information comprises corporate information (Directors, throughout the audit. We also: Officials and Registered Office), report of the Directors and y Identify and assess the risks of material misstatement of statement of directors’ responsibilities. Other information does the financial statements, whether due to fraud or error, not include the financial statements and our auditor’s report design and perform audit procedures responsive to those thereon. Our opinion on the financial statements does not risks, and obtain audit evidence that is sufficient and cover the other information and we do not express an audit appropriate to provide a basis for our opinion. The risk opinion or any form of assurance conclusion thereon. of not detecting a material misstatement resulting from In connection with our audit of the financial statements, our fraud is higher than for one resulting from error, as fraud responsibility is to read the other information and, in doing may involve collusion, forgery, intentional omissions, so, consider whether the other information is materially misrepresentations, or the override of internal control. inconsistent with the financial statements or our knowledge y Obtain an understanding of internal controls relevant obtained in the audit, or otherwise appears to be materially to the audit in order to design audit procedures that are misstated. If, based on the work we have performed on the appropriate in the circumstances, but not for the purpose other information obtained prior to the date of this auditor’s of expressing an opinion on the effectiveness of the Bank’s report, we conclude that there is a material misstatement of internal control. this other information, we are required to report that fact. We y Evaluate the appropriateness of accounting policies used have nothing to report in this regard. and the reasonableness of accounting estimates and Responsibilities of the directors for the financial statements related disclosures made by the Directors. The Directors are responsible for the preparation and fair y Conclude on the appropriateness of the Directors’ use of the presentation of the financial statements in accordance going concern basis of accounting and based on the audit with International Financial Reporting Standards and the evidence obtained, whether a material uncertainty exists requirements of the Companies Act, 2019 (Act 992) and related to events or conditions that may cast significant the Banks and Specialized Deposit-Taking Institutions Act, doubt on the Bank’s ability to continue as a going concern. 2016 (Act 930) and for such internal control as the Directors If we conclude that a material uncertainty exists, we are determine is necessary to enable the preparation of financial required to draw attention in our auditor’s report to the statements that are free from material misstatement, whether related disclosures in the financial statements or, if such due to fraud or error. disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up In preparing the financial statements, the directors are to the date of our auditor’s report. However, future events responsible for assessing the Bank’s ability to continue as a or conditions may cause the Bank to cease to continue as going concern, disclosing, as applicable, matters relating to a going concern. going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Bank or to y Evaluate the overall presentation, structure and content cease operations, or have no realistic alternative but to do so. of the financial statements, including the disclosures, and whether the financial statements represent the underlying Auditor’s responsibilities for the audit of the financial transactions and events in a manner that achieves fair statements presentation. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from We communicate with the Directors regarding, among other material misstatement, whether due to fraud or error, and to matters, the planned scope and timing of the audit and issue an auditor’s report that includes our opinion. Reasonable significant audit findings, including any significant deficiencies assurance is a high level of assurance but is not a guarantee in internal controls that we identify during our audit. that an audit conducted in accordance with ISAs will always We also provide the Directors with a statement that we have detect a material misstatement when it exists. Misstatements complied with relevant ethical requirements regarding can arise from fraud or error and are considered material if, independence, and to communicate with them all relationships individually or in the aggregate, they could reasonably be and other matters that may reasonably be thought to bear on expected to infuence the economic decisions of users taken on our independence, and where applicable, actions taken to the basis of these financial statements. eliminate threats or related safeguards applied.

36 SOCIETE GENERALE GHANA PLC Ernst & Young Chartered Accountants Tel: +233 302 779868 / 4275 / 9223 / 2091 G15, White Avenue Fax: +233 302 778894 / 2934 Airport Residential Area ey.com P. O. Box KA 16009, Airport Accra, Ghana

Independent Auditor’s Report cont’d

From the matters communicated with the Directors, we y We are independent of the Bank pursuant to Section 143 determine those matters that were of most significance in the of the Companies Act, 2019 (Act 992). audit of the financial statements of the current period and are The Banks and Specialized Deposit-Taking Institutions Act, therefore the key audit matters. We describe these matters 2016 (Act 930) under Section 85(2) requires that we report on in our auditor’s report unless law or regulation precludes certain matters. Accordingly, we state that: public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be y The accounts give a true and fair view of the statement communicated in our report because the adverse consequences of affairs of the Bank and the results of operations for the of doing so would reasonably be expected to outweigh the year under review; public interest benefits of such communication. y We were able to obtain all the information and explanations Report on other legal requirements required for the efficient performance of our duties; The Companies Act, 2019 (Act 992) requires that in carrying out y The transactions of the bank are generally within the our audit we consider and report on the following matters. We powers of the Bank; confirm that: y The Bank has generally complied with the provisions of y We have obtained all the information and explanations the Banks and Specialized Deposit-Taking Institutions Act, which to the best of our knowledge and belief were 2016 (Act 930). necessary for the purposes of our audit; y The Bank has generally complied with the provisions of y In our opinion, proper books of account have been kept by the Anti-Money Laundering Act, 2008 (Act 749), the Anti- the Bank, so far as appears from our examination of those Terrorism Act, 2008 (Act 762) and regulations made under books; these enactments; y Proper returns adequate for the purpose of our audit have The Engagement Partner on the audit resulting in this been received from branches not visited by us; independent auditor’s report is Pamela Des Bordes y The statement of financial position and the statement of (ICAG/P/1329). comprehensive income (statement of profit or loss and other comprehensive income) are in agreement with the accounting records and returns. y In our opinion, to the best of our information and ...... according to the explanations given to us, the accounts Ernst & Young (ICAG/F/2021/126) give the information required under the Act, in the manner Chartered Accountants so required and give a true and fair view of the state of Accra, Ghana affairs of the Bank at the end of the financial year and of 22 April, 2021 the profit or loss for the financial year then ended.

SOCIETE GENERALE GHANA PLC 37 FINANCIAL HIGHLIGHTS

38 SOCIETE GENERALE GHANA PLC THE FINANCIAL STATEMENTS

SOCIETE GENERALE GHANA PLC 39 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020

Note 2020 2019 GH¢ GH¢ Interest income 5 519,463,379 454,048,757 Interest expense 6 (114,251,411) (88,235,057)

Net interest income 405,211,968 365,813,700 Fees & commission income 7 77,148,106 74,304,756 Fees & commission expense 8 (22,847,209) (23,154,024)

Net fees and commission income 54,300,897 51,150,732 Net trading revenue 9 41,660,244 34,516,774 Net income from other financial instruments carried at fair value 10 52,417,416 39,746,459 Other operating expense /income 11 (4,644,872) 17,828,591

Total other operating income 89,432,788 92,091,824 Operating income 548,945,653 509,056,256 Net impairment loss on financial assets 12 (33,349,574) (54,922,666) Personnel expense 13 (128,691,845) (123,237,364) Depreciation and amortization 22a (33,588,164) (33,180,681) Other operating expenses 14 (131,686,035) (121,024,195)

Profit before income tax 221,630,035 176,691,350 Income tax expenses 15 (67,421,120) (48,149,164)

Profit after tax expense 154,208,915 128,542,186 Other comprehensive income Fair value on available for sale financial instrument 1,781,205 - Less tax (445,301) - Other comprehensive income, net of income tax 1,335,904 -

Total comprehensive income for the period 155,544,819 128,542,186 Earnings per share: Basic earnings per share (GH¢) 16 0.217 0.181 Diluted earnings per share (GH¢) 16 0.217 0.181

40 SOCIETE GENERALE GHANA PLC STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

Note 2020 2019 GH¢ GH¢ Assets Cash and cash equivalents 17 1,561,983,616 1,295,640,731 Non-pledged trading assets 18 67,896,476 57,523,936 Debt instruments at fair value through other comprehensive income 21 108,961,776 - Debt instruments at amortised cost 21 427,587,822 83,104,992 Loans and advances to customers 20 2,562,706,675 2,643,394,001 Equity investments 19 12,236,465 8,862,900 Other assets 25 66,511,519 62,514,235 Property, plant and equipment 22 290,748,100 290,868,619 Intangible assets 23 1,264,470 1,728,565 Deferred tax assets 15b 15,309,433 271,230

Total assets 5,115,206,352 4,443,909,209 Liabilities Deposits from banks 27 3,945,938 25,675,390 Deposits from customers 27 3,481,343,321 3,169,705,971 Borrowings 26 366,266,787 177,695,977 Current tax liabilities 24 25,752,524 35,751,330 Other liabilities 28 312,302,893 233,119,110

Total liabilities 4,189,611,463 3,641,947,778 Shareholders’ fund Stated capital 29 404,245,427 404,245,427 Income surplus 39c 149,907,074 66,161,749 Revaluation reserve 39d 123,670,260 123,670,260 Statutory reserve 39e 246,436,224 207,883,995 Other reserves 39h 1,335,904 -

Total shareholders’ fund 925,594,889 801,961,431 Total liabilities and shareholders’ fund 5,115,206,352 4,443,909,209

The accompanying notes form an integral part of these financial statements. Approved by the Board on 24 March 2021 and signed on its behalf as follows:

……………………………...... …………………………...... …. Margaret Boateng Sekyere (Chairperson) Hakim Ouzzani (Managing Director) 22 April, 2021 22 April, 2021

SOCIETE GENERALE GHANA PLC 41 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020

Stated Income Revaluation Statutory Other Total Capital surplus Reserve reserve reserves shareholders’ GH¢ GH¢ GH¢ GH¢ GH¢ equity GH¢

For the year ended 31 December 2020

Balance as at 1 January 2020 404,245,427 66,161,749 123,670,260 207,883,995 - 801,961,431

Movements during the year:

Profit for the period - 154,208,915 - - - 154,208,915

Other movements in equity - - - - 1,335,904 1,335,904

Dividend - (31,911,361) - - - (31,911,361)

Transfer to statutory reserve - (38,552,229) - 38,552,229 - -

Balance as at 31 December 2020 404,245,427 149,907,074 123,670,260 246,436,224 1,335,904 925,594,889

Stated Income Revaluation Statutory Other Total Capital surplus Reserve reserve reserves shareholders’ GH¢ GH¢ GH¢ GH¢ GH¢ equity GH¢ For the year ended 31 December 2019

Balance as at 1 January 2019 404,245,427 30,256,311 123,670,260 143,612,902 - 701,784,900

Movements during the year :

Profit for the period - 128,542,186 - - - 128,542,186

Other movements in equity ------

Dividend - (28,365,655) - - - (28,365,655)

Transfer to statutory reserve - (64,271,093) - 64,271,093 - -

Balance as at 31 December 2019 404,245,427 66,161,749 123,670,260 207,883,995 - 801,961,431

42 SOCIETE GENERALE GHANA PLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020

2020 2019 Note GH¢ GH¢ Cash flow from operating activities Operating profit before taxation 221,630,035 176,691,350 Adjustments for: Impairment provision 20 (37,969,111) 698,214 Fair value adjustment on equity investment 19 1,038,501 (109,751) Fair value adjustment on available for sale instrument 39h 1,781,205 - Fair value adjustment on non pledged trading assets 18a 797,756 (213,919) Depreciation and amortization 22 33,588,164 33,180,681 Unrealized gain/loss on forex and revaluations 5,918,445 (15,797,088) Profit on sales of property, plant and equipment 11 - (623,961) Operating profit before working capital changes 226,784,995 193,825,526 Changes in operating and other assets and liabilities Change in non-pledged trading assets 18 (11,170,296) 18,408,477 Change in loans and advances to customers 20 118,656,437 (978,808,015) Change in other assets 25 (3,997,284) (7,066,831) Change in derivative financial assets - 5,380,060 Change in deposit from banks 27 (21,729,452) 22,008,019 Change in deposit from customers 27 311,637,350 1,008,323,373 Change in other liabilities 28 79,183,783 53,059,612 472,580,538 121,304,695 Income tax paid 24a & 24b (92,903,430) (45,634,918)

Net cash generated from operating activities 606,462,103 269,495,303 Cash flow from investing activities Change in investment securities 21 (453,444,606) 608,312,282 Equity investments 19 (4,412,066) (5,946,107) Purchase of property, plant and equipment 22b (32,605,733) (33,670,292) Purchase of intangible assets 23 (397,817) (662,615) Proceeds from sale of property, plant and equipment - 762,100 Net cash (used in)/generated from investing activities (490,860,222) 568,795,368 Cash flow from financing activities Proceeds from borrowings 26 202,544,707 - Repayment of borrowings 26 (13,973,897) (171,917,428) Dividend paid 30 (31,911,361) (28,365,655) Net cash (used in)/generated from financing activities 156,659,449 (200,283,083) Change in cash and cash equivalents 272,261,330 638,007,588 Net foreign exchange difference (5,918,445) 15,797,088 Cash & cash equivalents as at 1 january 1,295,640,731 641,836,055 Cash and cash equivalents as at 31 december 2020 17 1,561,983,616 1,295,640,731 Operational cash flows from interest: Interest received 516,115,683 437,858,960 Interest paid 111,882,687 85,814,071 Dividend received 133,640

SOCIETE GENERALE GHANA PLC 43 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

1. Reporting entity 2.4 Presentation of financial statements Societe Generale Ghana PLC (the Bank) is a limited The Bank presents its statement of financial position liability company incorporated in Ghana under the in order of liquidity. An analysis regarding recovery Companies Code, 2019 (Act 992). The Bank is domiciled or settlement within 12 months after the reporting in Ghana with its registered office at 2nd Crescent, date(current ) and more than 12 months after the date Royalt Castle Road, Ring Road Central, Accra. The Bank is presented in note 36. is authorized and licensed to carry out the business of 2.5 Accounting policies banking and provides retail banking, corporate banking, The accounting policies adapted by the bank are investment banking and other financial intermediation consistent with those of the previous financial year. activities and specialized financing activities such as leasing and consumer credits through its network of 2.6 Foreign currency transactions branches and outlets including divisions across Ghana. Transactions denominated in foreign currencies are recorded in the functional currency using the exchange The principal activities of the Bank are described in rates prevailing at the date of the transactions. Monetary the Directors’ Report. Societe Generale (Group), a bank assets and liabilities denominated in foreign currencies incorporated in France, is the ultimate parent of the are translated at the functional currency rate of exchange Bank. ruling at the reporting date. The Bank is listed on the Ghana Stock Exchange (GSE). Foreign exchange gains and losses resulting from This has enabled the equity shares of the Bank to be the settlement of foreign currency transactions are traded publicly on the GSE. recognized in profit or loss under the heading “trading revenue”. Foreign exchange gains and losses resulting 1.1 Authorization for publication from the translation at year-end exchange rates of The financial statements of the Bank for the year monetary assets and liabilities denominated in foreign ended 31 December 2020 were authorized for issue in currencies are recognized in profit or loss under the accordance with a resolution of the board of directors on heading “other operating income’’. 24 March 2021 The effect of exchange rate changes on cash and cash 2. Basis of preparation equivalents held or due in a foreign currency is reported in the statement of cash fow as part of the reconciliation 2.1 Statement of compliance of cash and cash equivalents at the beginning and end These financial statements of the Bank have been of the period. This amount is presented separately prepared in accordance with International Financial from cash fows from operating, investing and financing Reporting Standards (IFRS) as issued by the activities and includes the differences, if any, had those International Accounting Standards Board (IASB) and cash flows been reported at end of period exchange accounting requirement as dictated by the guide for rates. financial publication 2017 issued by the Bank of Ghana. Except as otherwise specified by the guide for financial 2.7 Segmental reporting publication, the financial statements were prepared in IFRS 8 requires the identification of operating segments accordance with IFRS. to be on the basis of internal reports that are reviewed by an entity’s Chief Operating Decision Maker (CODM) to allocate resources to the segment and assess its 2.2 Basis of measurement performance. The financial statements have been prepared on the historical cost basis except for the following material IFRS 8 requires entities whose shares or debts are traded items that are measured at fair value in the Statement publicly to produce segmental report. of Financial Position: Societe Generale Ghana PLC is managed on a basis y Financial assets and liabilities held-for-trading that takes account of the different business lines that dominate the operating activities of the Bank. Major y Derivative financial instruments business lines of the Bank are: y Equity investments a. Retail banking 2.3 Functional and presentation currency b. Corporate banking The financial statements are presented in Ghana Cedis [GH¢], which is the functional and presentational c. Treasury currency of the Bank.

44 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

The banking activities of the Bank have been segmented The carrying values of property and equipment are into various business lines. The profitability of these reviewed for indications of impairment annually, or business lines is assessed based on the profit or loss when events or changes in circumstances indicate statement produced. These are illustrated in Note 38. the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash- 2.8 Property, plant and equipment - continued generating units are written down to their recoverable Properties in the course of construction for provision amount. of services or administrative purposes are carried at cost, less any recognised impairment loss. Cost The recoverable amount of property and equipment is includes professional fees and, for qualifying assets, the greater of fair value less costs to sell and value in use. borrowing costs capitalised in accordance with the In assessing value in use, the estimated future cash fows bank’s accounting policy. Such properties are classified are discounted to their present value using a pre-tax to the appropriate categories of property, plant and discount rate that refects current market assessments equipment when completed and ready for intended use. of the time value of money and the risks specific to the Depreciation of these assets, on the same basis as other asset. property assets, commences when the assets are ready An item of property, plant and equipment is for their intended use. derecognized upon disposal or when no future economic Depreciation on revalued buildings is recognised in benefits are expected to arise from the continued use profit or loss. On the subsequent sale or retirement of a of the asset. Any gain or loss arising on derecognizing revalued property, the attributable revaluation surplus of the asset (calculated as the difference between the remaining in the properties revaluation reserve is net disposal proceeds and the carrying amount of the transferred directly to retained earnings. item) is included in profit or loss in the year the item is derecognized. Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and Residual values, useful lives and methods of depreciation properties under construction) less their residual for property and equipment are reviewed, and adjusted values over their useful lives, using the straight-line if appropriate, at each reporting date. method. The estimated useful lives, residual values The new standard IFRS 16 Accounting for leases, which and depreciation method are reviewed at the end of became effective on 1 January 2019, has been adopted each reporting period, with the effect of any changes in by the bank. This standard replaces IAS 17, which was estimate accounted for on a prospective basis. governing both operating and finance lease. IFRS 16 The current annual depreciation rates for each class of defines lease as a contact that conveys the right to use property, plant and equipment are as follows: an asset (underlying asset) for a period in exchange for a consideration. Under the new standard, Lessees are Buildings 3.0% no longer required to distinguish between finance and Furniture and equipment 20.0% operating leases. Instead, they are to recognize a right of use asset and a corresponding lease liability at the Computer 33.3% inception of the lease and subsequently depreciate the Household furniture 25.0% asset over the lease term. Motor vehicles 33.3% 2.9 Intangible assets: computer software Costs incurred to acquire and bring to use specific computer software licenses are capitalized. Following Leasehold land amortized over leased period initial recognition, intangible assets are carried at cost Right of use assets are amortised over the shorter of the less accumulated amortization and any impairment lease term and the asset’s useful life. losses. The amortization period and method for an intangible asset, in this case computer software, are Freehold land not depreciated reviewed at least at each reporting date. Changes in Costs associated with routine servicing and the expected useful life in the asset are accounted for maintenance of assets are expensed as incurred. by changing the amortization period or method, as Subsequent expenditure is only capitalized if it is appropriate, and treated as changes in accounting probable that future economic benefits associated with estimates. The amortization expense on the intangible the item will fow to the Bank. assets is recognized in profit or loss in the expense category consistent with the function of the intangible

SOCIETE GENERALE GHANA PLC 45 Notes to the Financial Statements cont’d

asset. Amortisation is calculated using the straight line specific recognition criteria are met before revenue is method on the basis of the expected useful lives of the recognized: assets which range between 3 and 5 years. a. Interest income The carrying values of intangible assets are reviewed Under IFRS 9 , interest income is recorded using the for indications of impairment annually or when events effective interest rate (EIR) method for all financial or changes in circumstances indicate that the carrying instruments measured at amortised cost and financial value may not be recoverable. instruments designated at FVPL. Interest income on If any such indication exists and where the carrying interest bearing financial assets measured at FVOCI, are values exceed the estimated recoverable amount, the also recorded by using the EIR method. The EIR is the rate assets or cash-generating units are written down to their that exactly discounts estimated future cash receipts recoverable amount. through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying The recoverable amount of intangible assets is the amount of the financial asset. The EIR (and therefore, greater of fair value less costs to sell and value in use. In the amortised cost of the asset) is calculated by taking assessing value in use, the estimated future cash fows into account any discount or premium on acquisition, are discounted to their present value using a pre-tax fees and costs that are an integral part of the EIR. The discount rate that refects current market assessments Bank recognises interest income using a rate of return of the time value of money and the risks specific to the that represents the best estimate of a constant rate asset. of return over the expected life of the loan. Hence, it Gains or losses arising from de- recognition of an recognises the effect of potentially different interest intangible asset are measured as the difference between rates charged at various stages, and other characteristics the net disposal proceeds and the carrying amount of of the product life cycle (including prepayments, penalty the asset and are recognized in profit or loss when the interest and charges). asset is derecognized. If expectations regarding the cash fows on the financial asset are revised for reasons other than credit risk, 2.10 Provisions the adjustment is booked as a positive or negative The Bank recognizes provisions when it has a present adjustment to the carrying amount of the asset in obligation (legal or constructive) as a result of a past the statement of financial position with an increase event and it is probable that an outfow of resources or reduction in interest income. The adjustment is embodying economic benefits will be required to subsequently amortised through Interest and similar settle the obligation and a reliable estimate can be income in the statement of profit or loss. made of the amount of the obligation. Where the Bank When a financial asset becomes credit-impaired and expects some or all of a provision to be reimbursed, the is, therefore, regarded as ‘Stage 3’, the Bank calculates reimbursement is recognized as a separate asset but interest income by applying the effective interest rate only when the reimbursement is virtually certain. to the net amortised cost of the financial asset. If the The expense relating to any provision is presented in financial assets cures and is no longer credit-impaired, profit or loss net of any reimbursement. the Bank reverts to calculating interest income on a gross basis. If the effect of the time value of money is material, provisions are determined by discounting the expected For purchased or originated credit-impaired (POCI) financial assets the Bank calculates interest income by future cash fows at a pre-tax rate that refects current calculating the credit-adjusted EIR and applying that rate market assessments of the time value of money and, to the amortised cost of the asset. The credit-adjusted where appropriate, the risks specific to the liability. EIR is the interest rate that, at original recognition, 2.11 Employee benefits discounts the estimated future cash flows (including The Bank contributes to a three-tier defined contribution credit losses) to the amortised cost of the POCI assets. scheme on behalf of employees. The tier one and two Interest income on all trading assets and financial are mandatory. The Bank contributions 10% towards assets mandatorily required to be measured at FVPL the voluntary tier three plan. is recognised using the contractual interest rate in net trading income and Net gains/(losses) on financial 2.12 Revenue assets at fair value through profit or loss, respectively. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Bank and the revenue can be reliably measured. The following

46 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

b. Commissions and fees a. Current income tax Commission and fees, revenues and expenses that are Current tax is the tax expected to be payable under the integral part of financial instruments and are included Income Tax Act, 2018 (Act 979) on the taxable profit in the measurement of the effective interest rate are for the year, calculated using the tax rates enacted or spread over the period of the financial instruments. substantially enacted by the reporting date, and any Commission and fees in respect of services are adjustment to tax payable in respect of previous years. recognized in the profit or loss statement when the Current tax assets and liabilities are offset when the related services are performed. The Bank’s revenue Bank intends to settle on net basis and the legal right to contracts do not typically include multiple performance set off exists. obligations. Current income tax relating to items recognized directly The Bank earns commission and fees from a diverse in equity or other comprehensive income is recognized range of services provided to its customers. Fees in equity or other comprehensive income and not in profit or loss. revenue is accounted for as follows: b. Deferred income tax y Revenue is earned on execution of discrete act Deferred tax liabilities are recognized for all taxable (such as funds transfers, special clearing and fees temporary differences, except: arising from negotiating transactions with third parties) is recognized as revenue when the act is y Where the deferred tax liability arises from the completed. initial recognition of goodwill or of an asset or liability in a transaction that is not a business y Income earned from the provision of services (such combination and, at the time of the transaction, as request for special statements, safe custody, affects neither the accounting profit nor taxable COTs and advisory services) is recognized as profit or loss. revenue as the services are provided. y In respect of taxable temporary differences y Fees which forms an integral part of the effective associated with investments in subsidiaries, interest rate of a financial instrument (such as associates and interests in joint ventures, where commitment and processing fees on corporate the timing of the reversal of the temporary loans) is recognized as an adjustment to the differences can be controlled and it is probable that effective interest rate. the temporary differences will not reverse in the foreseeable future. c. Other operating income This is made up of other operating income including Deferred tax assets are recognized for all deductible bad debts recovered, dividend, profit or loss on sale of temporary differences, carry forward of unused tax property, plant and equipment, other miscellaneous credits and unused tax losses, to the extent that it is incomes and exchange gains. probable that taxable profit will be available against which the deductible temporary differences, and the 2.13 Interest expense carry forward of unused tax credits and unused tax Interest expense is recognized in profit or loss for losses can be utilized, except: all interest-bearing financial instruments measured at amortized cost, including loans and advances, as y Where the deferred tax asset relating to the interest accrues using the effective interest rate method. deductible temporary difference arises from The effective interest method is a method of calculating the initial recognition of an asset or liability in a the amortized cost of a financial liability and of allocating transaction that is not a business combination and, the interest expense. at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. The effective interest rate is the rate that exactly discounts the estimated future cash payments over the In respect of deductible temporary differences expected life of the instrument or, when appropriate, associated with investments in subsidiaries, associates a shorter period, to the net carrying amount of the and interests in joint ventures, deferred tax assets are financial liability. recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable 2.14 Taxation future and taxable profit will be available against which Income tax charged to the profit or loss account for the the temporary differences can be utilized. year comprises current tax and deferred tax. Income tax is recognized in profit or loss except to the extent that Deferred tax is calculated using the rate expected to it relates to items recognized directly in shareholders’ apply in the period in which the assets will be realized or equity or other comprehensive income, in which the liabilities settled. Deferred tax assets and liabilities case it is recognized in shareholders’ equity or other are offset when they arise in the same tax reporting comprehensive income.

SOCIETE GENERALE GHANA PLC 47 Notes to the Financial Statements cont’d

entities and relate to income taxes levied by the same Financial assets include both debt and equity taxation authority, and when a legal right to set off exists instruments. in the entity. 2.16.2 Debt instruments The carrying amount of deferred income tax assets Debt instruments, including loans and debt securities, is reviewed at each reporting date and reduced to the are classified into one of the following measurement extent that it is no longer probable that sufficient taxable categories: profit will be available to allow all or part of the deferred income tax asset to be utilized. y Amortized cost; Deferred tax relating to items recognized directly in y Fair value through other comprehensive income equity or other comprehensive income is recognized in (FVOCI); or equity or other comprehensive income and not in profit Classification of debt instruments is determined based or loss. on: c. Value added Tax -VAT i. the business model under which the asset is Revenues, expenses and assets are recognized net of the held; and amount of VAT except: ii. the contractual cash fow characteristics of the y Where the value added tax incurred on a purchase instrument of goods and services is not recoverable from the taxation authority, the value added tax is 2.16.3 Business model assessment recognized as part of the cost of acquisition of the Business model assessment involves determining asset or as part of the expense item as applicable; whether financial assets are managed in order to and receivables and payables are stated with the generate cash flows from collection of contractual amount of value added tax included. cash flows, selling financial assets or both. The Bank assesses business model at a portfolio level refective of y The net amount of value added tax recoverable how groups of assets are managed together to achieve from, or payable to, the Ghana Revenue Authority a particular business objective. For the assessment of is included as part of receivables or payables in the business model the Bank takes into consideration the statement of financial position. following factors: 2.15 National stabilization levy y how the performance of assets in a portfolio is Under the National Fiscal Stabilization Levy Act, 2013 of evaluated and reported to group heads and other Ghana, financial institutions and some large firms were key decision makers within the Bank’s business required to pay a levy of 5% of their profit before tax lines; towards fiscal stabilization with effect from July 2013. The Bank has complied with this statutory obligation. y the risks that affect the performance of assets held within a business model and how those risks are 2.16 Classification & measurement of financial assets and managed; liabilities y whether the assets held for trading purposes i.e., assets that the Bank acquires or incurs principally 2.16.1 Recognition and initial measurement for the purpose of selling or repurchasing in the The Bank on the date of origination or purchase near term, or holds as part of a portfolio that is recognizes loans, debt and equity securities, deposits managed together for short-term profit or position and subordinated debentures at the fair value of taking; consideration paid. Regular-way purchases and sales of financial assets are recognized on the settlement y the frequency and volume of sales in prior periods date. All other financial assets and liabilities, including and expectations about future sales activity. derivatives, are initially recognized on the trade date at which the Bank becomes a party to the contractual 2.16.4 Cash flow characteristics assessment provisions of the instrument. The contractual cash flow characteristics assessment involves assessing the contractual features of an The initial measurement of a financial asset or liability instrument to determine if they give rise to cash fows is at fair value plus transaction costs that are directly that are consistent with a basic lending arrangement. attributable to its purchase or issuance. For instruments Contractual cash flows are consistent with a basic measured at fair value through profit or loss, transaction lending arrangement if they represent cash flows that costs are recognized immediately in profit or loss.

48 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

are solely payments of principal and interest on the 2.16.6 Debt instruments measured at FVOCI principal amount outstanding (SPPI). Debt instruments are measured at FVOCI only if the assets are held within a business model whose objective Principal is defined as the fair value of the instrument at is achieved by collecting contractual cash flows and initial recognition. Principal may change over the life of selling financial assets; and the contractual terms of the the instruments due to repayments. financial asset give rise on specified dates to cash fows In performing this assessment, the Bank takes into that are Solely Payments of Principal and Interest (SPPI) consideration contractual features that could change and such assets have not been designated as at FVTPL. the amount or timing of contractual cash flows, such In addition, on initial recognition, the Bank may that the cash flows are no longer consistent with a irrevocably designate a financial asset that otherwise basic lending arrangement. If the Bank identifies any meets the requirements to be measured at amortised contractual features that could modify the cash fows of cost or at FVOCI as at FVTPL if doing so eliminates or the instrument such that they are no longer consistent significantly reduces an accounting mismatch that with a basic lending arrangement, the related financial would otherwise arise. asset is classified and measured at FVTPL. Non pledged trading assets and derivative assets of the bank are 2.16.7 Equity instruments measured under FVTPL whilst Loans and advances are Equity instruments are measured at FVTPL, unless measured under amortised cost based on their cashfow an election is made to designate them at FVOCI upon characteristics and business model. purchase. For equity instruments measured at FVTPL, 2.16.5 Debt instruments measured at amortized cost changes in fair value are recognized as part of Non- Debt instruments are measured at amortized cost if they interest income in the profit or loss statement. An are held within a business model whose objective is to election has not been made to designate any of the hold for collection of contractual cash fows where those equity instrument at FVOCI as such all equity instruments cash flows represent solely payments of principal and are measured at FVTPL in the current year. interest. After initial measurement, debt instruments The Bank can elect to classify non-trading equity in this category are carried at amortized cost using the instruments at FVOCI. This election will be used for effective interest rate method. The effective interest certain equity investments for strategic or longer term rate is the rate that discounts estimated future cash investment purposes. The FVOCI election is made upon payments or receipts through the expected life of the initial recognition, on an instrument-by-instrument financial asset to the gross carrying amount of a financial basis and once made is irrevocable. Gains and losses asset. Amortized cost is calculated taking into account on these instruments including when derecognized/ any discount or premium on acquisition, transaction sold are recorded in OCI and are not subsequently costs and fees that are an integral part of the effective reclassified to the profit or loss. Dividends received are interest rate. Investment securities are measured under recorded in other operating expenses/income in the amortised cost. Statement of Profit or Loss and Other Comprehensive Impairment on debt instruments measured at Income. Any transaction costs incurred upon purchase amortized cost is calculated using the expected credit of the security are added to the cost basis of the security loss approach. Loans and debt securities measured at and are not reclassified to the profit or loss on sale of amortized cost are presented net of the allowance for the security. Equity instruments at FVOCI are not subject credit losses in the statement of financial position. to an impairment assessment. An election has not been made to designate any of the equity instrument at FVOCI Debt instruments measured at FVTPL include assets as such all equity instruments are measured at FVTPL in held for trading purposes, assets held as part of a the current year. portfolio managed on a fair value basis and assets whose cash flows do not represent payments that are solely payments of principal and interest. These instruments 2.16.8 Financial liabilities are measured at fair value in the Statement of Financial Financial liabilities are classified as non-trading, held Position, with transaction costs recognized immediately for trading or designated as held at fair value through in the profit or loss statement as part of net income from profit or loss. Non-trading liabilities are recorded at other financial instruments carried at fair value. Realized amortized cost applying the effective interest method. and unrealized gains and losses are recognized as part of Held for trading liabilities or liabilities designated as Non-interest income in the profit or loss statement. Non held at fair value through profit or loss, are accounted pledged trading assets and derivative assets of the bank for as indicated above. A financial liability (trading are measured under FVTPL. or other) is removed from the balance sheet when it is extinguished – that is, when the obligation is

SOCIETE GENERALE GHANA PLC 49 Notes to the Financial Statements cont’d

discharged, cancelled or expired. The condition is met y Stage 2 – When a financial instrument experiences a when the liability is settled by paying the creditor, or SIR subsequent to origination but is not considered when the debtor is released from primary responsibility to be in default, it is included in Stage 2. This requires for the liability either by process of law or by the creditor. the computation of expected credit loss based Again or loss on extinguishment of a financial liability is on the probability of default over the remaining recognised in the profit or loss statement. Any net cash estimated life of the financial instrument. fow in relation to the restructuring of financial liabilities y Stage 3 – Financial instruments that are considered is an adjustment to the debt’s carrying amount and is to be in default are included in this stage. Similar to amortised over the remaining life of the liability. Stage 2, the allowance for credit losses captures the lifetime expected credit losses. 2.16.9 Impairment c. Measurement of expected credit loss a. Scope The probability of default (PD), exposure at default The Bank applies a three-stage approach to measure (EAD), and loss given default (LGD) inputs used to allowance for credit losses, using an expected credit estimate expected credit losses are modelled based on loss approach as required under IFRS 9, for the following macroeconomic variables that are most closely related categories of financial instruments that are not with credit losses in the relevant portfolio. The bank’s measured at fair value through profit or loss: portfolios have been segmented to ensure that they are y Amortized cost financial assets; consistent in terms of risk characteristics and to ensure better correlation with local macroeconomic variables. y Debt securities classified as at FVOCI; This segmentation factors in all specific characteristics y Off-balance sheet loan commitments; and associated with the bank’s activities. y Financial guarantee contracts. Details of these statistical parameters/inputs are as follows: Financial assets migrate through three stages based on y the change in credit risk since initial recognition. PD – The probability of default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the b. Expected credit loss impairment model The Bank’s allowance for credit losses calculations remaining estimated life, if the facility has not been are outputs of models with a number of underlying previously derecognized and is still in the portfolio. assumptions regarding the choice of variable inputs y EAD – The exposure at default is an estimate of and their interdependencies. The expected credit loss the exposure at a future default date, taking into impairment model refects the present value of all cash account expected changes in the exposure after the shortfalls related to default events either (i) over the reporting date, including repayments of principal following twelve months or (ii) over the expected life of a and interest, whether scheduled by contract or financial instrument depending on credit deterioration otherwise, expected drawdowns on committed from inception. The allowance for credit losses refects facilities, and accrued interest from missed an unbiased, probability-weighted outcome which payments. considers multiple scenarios based on reasonable and y supportable forecasts. LGD – The loss given default is an estimate of the loss arising in the case where a default occurs at a This impairment model measures credit loss allowances given time. It is based on the difference between using a three-stage approach based on the extent of the contractual cash fows due and those that the credit deterioration since origination: lender would expect to receive, including from the y Stage 1 – Where there has not been a significant realization of any collateral. It is usually expressed increase in credit risk (SIR) since initial recognition as a percentage of the EAD. of a financial instrument, an amount equal to 12 months expected credit loss is recorded. The d. Forward-looking information expected credit loss is computed using a probability The measurement of expected credit losses for each of default occurring over the next 12 months. stage and the assessment of significant increases in For those instruments with a remaining maturity credit risk considers information about past events of less than 12 months, a probability of default and current conditions as well as reasonable and corresponding to remaining term to maturity is supportable forecasts of future events and economic used. conditions. The estimation and application of forward- looking information requires significant judgement.

50 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

e. Macroeconomic factors and monitoring, there is a rebuttable presumption that In its models, the Bank relies on a broad range of forward the credit risk of the financial instrument has increased looking information as economic inputs, such as: GDP since initial recognition when contractual payments are growth, infation rates and central bank base rates. The more than 30 days overdue. inputs and models used for calculating expected credit Retail portfolio – For retail exposures, a significant losses may not always capture all characteristics of the increase in credit risk cannot be assessed using forward market at the date of the financial statements. To refect looking information at an individual account level. this, qualitative adjustments or overlays may be made as Therefore, the assessment must be done at the segment temporary adjustments using expert credit judgement. level. Segment migration thresholds exist for each PD The Bank determines allowance for credit losses using model by product which considers the proportionate three probability-weighted forward-looking scenarios. change in PD as well as the absolute change in PD. The The Bank considers both internal and external sources thresholds used for PD migration are reviewed and of information in order to achieve an unbiased measure assessed at least annually, unless there is a significant of the scenarios used. The forecasts are created using change in credit risk management practices in which internal and external models/data which are then case the review is brought forward. modified to refect future direction of relevant economic Non-retail portfolio – The Bank uses a risk rating scale variables as well as a representative range of other (IG codes) for its non-retail exposures. All non-retail possible forecast scenarios. exposures have an IG code assigned that refects the The most likely outcome is aligned with information probability of default of the borrower. Both borrower used by the Bank for other purposes such as strategic specific and non-borrower specific (i.e macroeconomic) planning and budgeting. The Bank has identified and forward looking information is considered and refected documented key drivers of credit risk and credit losses in the IG rating. Significant increase in credit risk is for each portfolio of financial instruments and, using an evaluated based on the migration of the exposures analysis of historical data, has estimated relationships among IG codes. between macro-economic variables, credit risk and credit losses. g. Expected life When measuring expected credit loss, the Bank f. Assessment of significant increase in credit risk considers the maximum contractual period over which (SIR) the Bank is exposed to credit risk. All contractual terms At each reporting date, the Bank assesses whether there are considered when determining the expected life, has been a significant increase in credit risk for exposures including prepayment, and extension and rollover since initial recognition by comparing the risk of default options. For certain revolving credit facilities,the occurring over the remaining expected life from the expected life is estimated based on the period over reporting date and the date of initial recognition. The which the Bank is exposed to credit risk and how the assessment considers borrower-specific quantitative credit losses are mitigated by management actions. and qualitative information without consideration of collateral, and the impact of forward-looking Presentation of allowance for credit losses in the macroeconomic factors. Statement of Financial Position The common assessments for SIR on retail and y Financial assets measured at amortized cost: as a non-retail portfolios include macroeconomic deduction from the gross carrying amount of the outlook, management judgement, delinquency and financial assets; monitoring. Forward looking macroeconomic factors y Debt instruments measured at fair value through are a key component of the macroeconomic outlook. other comprehensive income: no allowance is The importance and relevance of each specific recognized in the Statement of Financial Position macroeconomic factor depends on the type of product, because the carrying value of these assets is their characteristics of the financial instruments and the fair value. However, the allowance determined is borrower . Quantitative models may not always be able presented in the accumulated other comprehensive to capture all reasonable and supportable information income; that may indicate a significant increase in credit risk. Qualitative factors may be assessed to supplement y Off-balance sheet credit risks include undrawn the gap. Examples of situations include changes in lending commitments, letters of credit and letters adjudication criteria for a particular group of borrowers; of guarantee: as a provision in other liabilities. changes in portfolio composition and natural disasters impacting certain portfolios. With regards to delinquency

SOCIETE GENERALE GHANA PLC 51 Notes to the Financial Statements cont’d

h. Modified financial assets the borrower has already become insolvent or is certain If the terms of a financial asset are modified or an existing to become insolvent if the loan is not restructured). financial asset is replaced with a new one, an assessment Where they still pass the SPPI test, restructured loans is made to determine if the financial asset should be are still recorded in the Statement of Financial Position derecognized. Where the modification does not result and their amortised cost prior to impairment is adjusted in derecognition, the date of origination continues to for a discount representing the negative difference be used to determine SIR. Where modification results in between the present value of the new contractual cash derecognition, the modified financial asset is considered fows resulting from the restructuring of the loan and to be a new asset. the amortised cost prior to impairment less any partial debt forgiveness. This discount, representing earnings i. Definition of default foregone, is booked to cost of risk in the Statement The Bank considers a financial instrument to be in default of Profit or Loss and Other Comprehensive Income as a result of one or more loss events that occurred after .As a result, the associated interest income is still the date of initial recognition of the instrument and subsequently recognised at the initial effective interest the loss event has a negative impact on the estimated rate of the loans. Post-restructuring, these assets are future cash fows of the instrument that can be reliably systematically classified in Stage 3 for impairment estimated. This includes events that indicate: (credit-impaired exposures), as the borrowers are y significant financial difficulty of the borrower; deemed to be in default. Stage 3 classification is maintained for at least one year, or longer if the Bank is y default or delinquency in interest or principal uncertain that the borrowers will be able to meet their payments; commitments. Once the loan is no longer classified in y high probability of the borrower entering a phase of stage 3, the assessment of the significant increase of bankruptcy or a financial reorganization; credit risk will be performed by comparing the credit risk level at the closing date and the level at the initial y measurable decrease in the estimated future cash recognition date of the loan before restructuring. fows from the loan or the underlying assets that back the loan. l. Repossessed Properties /Collaterals The Bank considers that default has occurred and In its normal course of business, the Bank does not classifies the financial asset as impaired when it is physically repossess properties or other assets in its more than 90 days past due unless reasonable and loan portfolio, but engages external agents to recover supportable information demonstrates that a more funds, generally at auction, to settle outstanding debt. lagging default criterion is appropriate. Any surplus funds are returned to the customers/ obligors. As a result of this practice, the properties under j. Write-off policy legal repossession processes are not recorded on the The Bank writes off an impaired financial asset (and Statement of Financial position the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. 2.17 Regulatory credit reserve Where financial assets are secured, write-off is generally To cater for any excess of Bank of Ghana’s credit loss after receipt of any proceeds from the realization of provision requirements over loans and advances security. In circumstances where the net realizable value impairments based on IFRS principles, a transfer is made of any collateral has been determined and there is no from the income surplus (distributable reserves) to a reasonable expectation of further recovery, write-off non- distributable reserves in the statement of changes may be earlier. receivables 180 days past due, in equity, being the Regulatory Credit Reserve. are written-off. In subsequent periods, any recoveries The non-distributable Regulatory Credit Reserve ensures of amounts previously written off are credited to the that minimum regulatory provisioning requirements as provision for credit losses in the profit or loss statement. established by the Bank of Ghana are maintained. k. Restructured credit Loans issued by the Bank may be subject to restructuring 2.18 Dividend with the aim of securing the collection of the principal and Dividends declared are treated as an appropriation of interest by adjusting the contractual terms of the loan profit in the year of approval while dividends proposed (e.g. reduced interest rate, rescheduled loan payments, are disclosed as a note to the financial statements. partial debt forgiveness or additional collateral). Assets may only qualify for restructuring where the borrower is experiencing financial difficulties or insolvency (whether

52 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

2.19 Cash and cash equivalents being the premium received. Subsequent to initial For the purposes of the statement of cash fow, cash recognition, the Bank’s liability under each guarantee is and cash equivalents comprise cash on hand, cash and measured at the higher of the amount initially balances with the Central bank of Ghana and amounts recognised less cumulative amortisation recognised in due from banks and other financial institutions. the Statement of profit or loss and Other Comprehensive 2.20 Borrowing income. The premium received is recognised in the Borrowings by the Bank are initially recognized at Statement of profit or loss and Other Comprehensive fair value and there after stated at amortized cost. income in Net fees and commission income on a straight Associated net transaction costs of borrowings are line basis over the life of the guarantee. recognized in the Statement of profit or loss and Other Undrawn loan commitments and letters of credits are Comprehensive income over the maturity period of the commitments under which, over the duration of the borrowings. commitment, the Bank is required to provide a loan with pre-specified terms to the customer. 2.21 Repurchase and reverse repurchase agreements Securities sold under agreements to repurchase at 2.23 Other Assets a specified future date are not derecognized in the Other current assets is a default classification for assets Statement of Financial Position as the Bank retains which cannot be classified under any of the major substantially all of the risks and rewards of ownership. assets classification on the face of the account, or are The corresponding cash received is recognized in immaterial and need to be aggregated for presentation the statement of financial position as an asset with in a single line item in the Statement of Financial corresponding obligation to return it, including accrued position . Accounts included in the other current assets interest as a liability within Cash collateral on securities classification may includes inventory of consumables, lent and repurchase agreements, refecting the prepayments and sundry debtors. transaction’s economic substance as a loan to the Bank. The difference between the sale and repurchase prices 3.0 Significant Accounting Estimates, Assumptions & is treated as interest expense and is accrued over the Judgments life of agreement using the Effective Interest Rate (EIR). The preparation of financial statements, in conformity When the counterparty has the right to sell or re- pledge with IFRS, requires management to make estimates, the securities, the Bank reclassifies those securities in apply judgments and make assumptions that affect its statement of financial position to Financial assets the reported amount of assets and liabilities at the held for trading pledged as collateral or to Financial date of the financial statements, and income and investments available-for- sale pledged as collateral, as expenses during the reporting period. Estimates made appropriate. by management are based on historical experience and Conversely, securities purchased under agreements to other assumptions that are believed to be reasonable. resell at a specified future date are not recognized in the Key areas where management has made difficult, statement of financial position. The consideration paid, complex or subjective judgments, often as a result of including accrued interest, is recorded in the statement matters that are inherently uncertain, include those of financial position, within Cash collateral on securities relating to the allowance for impairement(Note 2.16.9) borrowed and reverse repurchase agreements, refecting and the fair value of financial instruments (note 35). the transaction’s economic substance as a loan by the While management makes its best estimates and Bank. The difference between the purchase and resale assumptions, actual results could differ from these prices is recorded in Net interest income and is accrued estimates and assumptions. over the life of the agreement using the EIR. 3.1 Significant developments: COVID-19 If securities purchased under agreement to resell On March 11, 2020, the World Health Organization are subsequently sold to third parties, the obligation to declared the outbreak of a strain of novel coronavirus return the securities is recorded as a short sale within disease, COVID-19, a global pandemic with Ghana Financial liabilities held for trading and measured at fair experiencing its first cases on 12 March 2020. The value with any gains or losses included in Net trading impact of COVID-19 on the global economy and financial revenue. markets has continued to evolve with disruptive effects on most economies, which has contributed to increased 2.22 Financial guarantees, letters of credit and undrawn market volatility and changes to the macroeconomic loan commitments environment. Financial guarantees are initially recognised in the financial statements (within Provisions) at fair value,

SOCIETE GENERALE GHANA PLC 53 In order to contain the spread of the pandemic, countries In addition, COVID-19 has continued to affect the embarked on massive lockdowns, business closures, bank’s employees, some clients and communities, with social distancing protocols, travel restrictions among resultant impacts on the bank’s operations, financial others. The effects of the pandemic, the containment results, present and future risks to the business. To date, measures and the phased reopening approach in several Societe General Ghana Plc has taken proactive measures regions could have longer-term effects on economic through its business continuity plans, carefully planning and commercial activity, consumer behavior after the the return to premise for some employees. The bank’s pandemic recedes, and containment measures are crisis management teams have increased its efforts to fully lifted. In conjunction with the COVID-19 pandemic preserve the well-being of employees and its ability to containment measures, governments, regulatory serve clients. There were no staff layoffs or redundancy bodies, central banks and private organizations around resulting from the direct impact of the COVID. the globe have continued to provide unprecedented relief programs and temporary measures to facilitate 3.2 Going concern the continued operation of the global economy and The management of the Bank has made an assessment financial system, which are intended to provide support of the Bank’s ability to continue as a going concern and to individuals and businesses. is satisfied that the Bank has the required resources to continue in business for the foreseeable future. As part of the policy response to minimize the risks associated with the COVID 19 pandemic, the Bank of During the year under review COVID-19 a world wide Ghana put in place the following policies in order to pandemic which erupted late 2019 has evolved rapidly. create the an enabling environment for the financial However for SG Ghana, COVID-19 is not expected to sector to support individuals and businesses in these have a significant impact on the entity. The Bank’s times. management is not aware of any material uncertainties that may cast significant doubt upon the Bank’s ability y Lowering of the Monetary Policy Rate (MPR) by to continue as a going concern. Consequently, the 150 basis points to 14.5 percent from 16%, which financial statements continue to be prepared on the it expected to transmit to lower bank lending rates going concern basis. and help ameliorate the challenges in securing credit at reasonable rates during this difficult socio- 3.3 Deferred tax assets economic environment. Deferred tax assets are recognized for all unused tax y Reduction in Primary Reserve Requirements from losses to the extent that it is probable that taxable 10 percent to 8 percent in order to create additional profit will be available against which the losses can be liquidity for the banks for on lending to critical utilized. Significant management judgment is required sectors of the economy to moderate the expected to determine the amount of deferred tax assets that can slowdown in growth be recognized based upon the likely timing and level of future taxable profits together with future tax planning y Reduction in prudential limit of Capital Adequacy strategies. Deferred tax is shown in Note 15b. Ratio from 13.0 percent to 11.5 percent to support the extension of additional credit by banks. 4. Application of new and revised International y Reduction in provisions for loans in the OLEM Financial Reporting Standards (IFRSs) category from 10 percent to 5 percent to address the impact of difficulties in loan repayments due 4.1 Standards and interpretations effective in the to the slowdown in economic activities, which may current period cause repayment challenges. The following standards, amendments to the existing standards and interpretations issued by the International In response to this, Societe General Ghana Plc reduced Accounting Standards Board were in issue: its rates in line with the reduction in the MPR rate for new loans for both retail and corporate loans. The bank The standards and interpretatoions that were issued but is also helping its clients by implementing various relief not yet effective for the financial year under review are measures, including payment deferrals, refinancing or disclosed below. credit restructuring, fee waivers and temporary limit increases across our loans portfolio. As at 31 December 4.2 Standards and interpretations in issue but not yet 2020, 680 clients had benefitted from the payment effective deferral program, which allowed the clients to defer The new and amended standards and interpretations payment on their facilities for a stipulated time. that are issued, but not yet effective, up to the date of issuance of the Bank’s financial statements are disclosed

SOCIETE GENERALE GHANA PLC 54 Notes to the Financial Statements cont’d

below. The Bank intends to adopt these new and y That a right to defer must exist at the end of the amended standards and interpretations, if applicable, reporting period when they become effective. y That classification is unaffected by the likelihood that an entity will exercise its deferral right IFRS 9 financial instruments – fees in the ’10 per cent’ test for derecognition of financial liabilities y That only if an embedded derivative in a convertible As part of its 2018-2020 Annual Improvements to IFRS liability is itself an equity instrument would the standards process, the IASB issued an amendment to terms of a liability not impact its classification IFRS 9. The amendment clarifies the fees that an entity The amendments are effective for annual reporting includes when assessing whether the terms of a new or periods beginning on or after 1 January 2023 and must modified financial liability are substantially different be applied retrospectively. The Group is currently from the terms of the original financial liability. These assessing the impact the amendments will have on fees include only those paid or received between the current practice and whether existing loan agreements borrower and the lender, including fees paid or received may require renegotiation. by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning Onerous contracts – costs of fulfilling a contract – amendments to IAS 37 of the annual reporting period in which the entity first In May 2020, the IASB issued amendments to IAS 37 to applies the amendment. specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with The amendments apply a “directly related cost earlier adoption permitted. The Bank will apply the approach”. The costs that relate directly to a contract amendments to financial liabilities that are modified to provide goods or services include both incremental or exchanged on or after the beginning of the annual costs and an allocation of costs directly related to period in which it will first apply the amendment and contract activities. General and administrative costs do does not expect this will result in a material impact on not relate directly to a contract and are excluded unless its financial statements. they are explicitly chargeable to the counterparty under the contract. Amendments to IAS 1: classification of liabilities as current or non-current The amendments are effective for annual reporting In January 2020, the IASB issued amendments to periods beginning on or after 1 January 2022. The Group paragraphs 69 to 76 of IAS 1 to specify the requirements will apply these amendments to contracts for which it for classifying liabilities as current or non-current. The has not yet fulfilled all its obligations at the beginning of amendments clarify: the annual reporting period in which it first applies the amendments. y What is meant by a right to defer settlement

55 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

5. Interest income 2020 2019 GH¢ GH¢ Placements 19,243,543 7,802,551 Investments securities 45,302,861 28,290,757 Loans & advances 454,916,975 417,955,449

519,463,379 454,048,757 Interest income recognition was based on the effective interest rate (EIR).

6. Interest and similar expense Savings accounts 35,322,870 29,675,137 Current accounts 774,428 417,706 Term deposits 64,649,461 43,534,150 Borrowings 13,504,652 14,608,064

114,251,411 88,235,057 Interest expense recognition was based on the effective interest rate (EIR).

7. Fees and commission income 2020 2019 GH¢ GH¢ Domestic operations 66,764,395 62,094,986 Remittance - 457,612 Cards operations 10,383,711 11,752,158

77,148,106 74,304,756

Fees and commission income was earned at a point in time

8. Fees and commission expense 2020 2019 GH¢ GH¢ Remittance - 1,903,711 Cards operations 20,908,369 19,441,674 books 245,062 254,391 Cash collection 1,693,778 1,554,248

22,847,209 23,154,024 Fees and commission expenses were incurred at a point in time

9. Net trading revenue Forex trading gains 148,253,870 181,113,417 Forex trading losses (106,593,626) (146,596,643)

41,660,244 34,516,774

SOCIETE GENERALE GHANA PLC 56 Notes to the Financial Statements cont’d

2020 2019 10. Net income from other financial instruments carried at fair value GH¢ GH¢ Gain from swap 37,772,649 25,544,696 Margin on bond trading 14,948,032 13,466,527 Fair value on equity instruments (note 19a) (303,265) 735,236 52,417,416 39,746,459

11. Other operating expense/income Profit on sale of plant, property and equipment - 623,961 Exchange (loss)/gain (5,086,460) 15,797,088 Rent/hiring fees 76,708 60,426 Postages 61,402 122,126 Dividend from associate 133,640 - Miscellaneous & others 169,838 1,224,990 (4,644,872) 17,828,591

12. Net impairment loss on financial assets Specific impairment 57,825,973 35,410,687 Portfolio impairment (5,806,425) 26,566,772 Total impairment (note 12a) 52,019,548 61,977,459 Recoveries (18,669,974) (7,054,793) Net impairment 33,349,574 54,922,666

12a. Total impairment Cash and cash equivalents (note 17c) 113,319 11,845 Investment securites 503,932 - Loans & advances (note 20f) 51,884,527 63,615,125 Lcs & guarantees ( off balance sheet liabilities) (note 32b) (482,230) (1,649,511) 52,019,548 61,977,459

13. Personnel expenses

Salaries, bonuses and staff allowances 100,671,892 98,413,512 Social security fund contribution 6,553,859 6,087,391 Provident fund contribution 5,031,328 4,654,799 Medicals 4,440,712 4,487,858 Insurance 793,309 565,616 Termination expenses 4,608,554 - Training 262,664 592,785 Other employee costs 3,135,173 5,038,858 Directors emoluments (13a) 3,194,354 3,396,545 128,691,845 123,237,364

57 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

The average number of persons employed by the Bank during the year was 562 (2019: 575). The Bank contributes to a three-tier defined contribution plan. The employee pays 5.5% and the Bank pays 13% making a total of 18.5%. The Bank transfers 13.5% to the first tier, 5% to a privately managed and mandatory second tier for lump sum benefit. The third tier is a voluntary provident fund and personal pension scheme to which the Bank contributes 10% of staff basic salary. 13a. Directors emoluments 2020 2019 GH¢ GH¢ Directors salaries and allowances 2,391,327 2,086,712 Directors expenses 187,365 894,767 Directors fees 615,662 415,066 3,194,354 3,396,545

14. Other operating expenses 2020 2019 GH¢ GH¢ Donations 1,281,617 853,845 Advertising and marketing 2,091,360 7,376,512 Office expenses (note 14a) 42,650,604 42,155,303 Administrative expenses 7,179,894 8,628,781 General expenses (note 14b) 78,482,560 62,009,754 131,686,035 121,024,195

14a. Office expenses 2020 2019 GH¢ GH¢ Utilities 6,176,802 6,091,564 Maintenance of computer softwate & hardware 13,230,373 14,520,249 Network & communication 6,887,939 7,134,212 Office & computer stationery 2,242,205 2,242,941 Repairs to furniture & equipment 1,788,374 1,697,897 Resource hiring 4,972,948 4,566,417 Other office expenses 7,351,963 5,902,023 42,650,604 42,155,303

14b. General expenses 2020 2019 GH¢ GH¢ Professional fees and charges 4,868,460 4,057,213 Repairs and rental of equipment 1,786,031 1,422,365 It and support services 43,674,912 49,513,442 Other general expenses 28,153,157 7,016,734 78,482,560 62,009,754

SOCIETE GENERALE GHANA PLC 58 Notes to the Financial Statements cont’d

14c. Auditors’ remuneration 2020 2019 GH¢ GH¢ Statutory audit 555,040 507,950 Auditors’ remuneration in relation to statutory audit amounted to GH¢ 555,040 (2019 : GH¢ 507,950) excluding tax.

15. Income tax expense 2020 2019 GH¢ GH¢ Current tax (24a) (71,823,122) (74,434,446) Deferred tax (15b) 15,483,504 35,119,850 National stabilization levy (15c) (11,081,502) (8,834,568) Charge to statement of profit or loss and other comprehensive income (67,421,120) (48,149,164)

15a. Current & deferred tax 2020 2019 GH¢ GH¢ Analysis of charge for the year Current tax (24a) (71,823,122) (74,434,446) Deferred tax (15b) 15,483,504 35,119,850 (56,339,618) (39,314,596) The current tax charge on the profit is based on Ghana’s corporate tax rate of 25% (2019:25%).

2020 2019 GH¢ GH¢ 15b. Deferred tax Balance as at 1 january 271,230 (34,848,620) Tax expense recognised in profit or loss during the year 15,483,504 35,119,850 Tax recognised in equity during the year (445,301) - Balance as at 31 December 15,309,433 271,230

Deferred tax assets and liabilities are attributable to the following: 2020 2019 Assets Liabilities Net Assets Liabilities Net GH¢ GH¢ GH¢ GH¢ GH¢ GH¢

Property, plant and equipment - (41,223,420) (41,223,420) - (41,223,420) (41,223,420)

Provisions and contingencies 56,978,154 - 56,978,154 41,494,650 - 41,494,650

Available for sale instrument - (445,301) (445,301) - - -

Net tax liabilities/(assets) 56,978,154 (41,668,721) 15,309,433 41,494,650 (41,223,420) 271,230

59 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

2020 2019 GH¢ GH¢ 15c. National stabilization levy Analysis of charge for the Year Charge to statement of profit or loss and other comprehensive income (11,081,502) (8,834,568)

In accordance with the National Fiscal Stabilization Act, 2013 (Act 862) all companies in Banking, Non Bank Financial Institutions, Insurance, Mining, Brewery and Communication are supposed to pay a levy of 5% of profit before tax towards National Fiscal Stability. 15d. Factors affecting the current Tax charged for the year A reconciliation of the charge that would result from applying the standard Ghana corporate tax rate to profit before tax to tax charge for the year is given below: 2020 2019 GH¢ GH¢ Pretax profit for the year 221,630,035 176,691,350 Tax charge thereon at Ghana corporate tax rate of 25% 55,407,509 44,172,838 Factors affecting Charge: Non deductible expenses 25,676,460 30,541,281 Income exempted (24,744,351) (35,399,523) National Stabilisation Levy 11,081,502 8,834,568 Tax on corporate profit (Note 15) 67,421,120 48,149,164 Effective Corporate Income tax rate 30.4% 27.3%

The tax charge on profit for the year is based on Ghana’s corporate tax rate of 25% . A National Stabilisation Levy of 5% is also charged (2019 : Corporate tax 25%, National Stabilisation Levey 5%).

16. Earnings per share Basic earnings per share is calculated by dividing the profit after tax for the year attributable to the equity holders of the Bank by the weighted average number of shares, held during the year after deducting treasury shares. The following table shows the income and share data used in the calculation of the basic earnings per share:

2020 2019

Profit attributable to shareholders of the Bank (GH¢) 154,208,915 128,542,186 Number of Shares Weighted Average number of oustanding ordinary shares 709,141,367 709,141,367 Basic Earning per Share (GH¢) 0.217 0.181 Diluted Earnings per Share (GH¢) 0.217 0.181

Diluted Earnings per Share The Bank has no category of dilutive potential ordinary shares.

SOCIETE GENERALE GHANA PLC 60 Notes to the Financial Statements cont’d

17. Cash and cash equivalents 2020 2019 GH¢ GH¢ Cash on hand and cash balances with bank of ghana (note 17a) 640,873,048 556,765,384 Due from banks and other institutions (note 17b) 921,536,236 739,187,696 Gross cash and cash equivalent 1,562,409,284 1,295,953,080 Less impairment (425,668) (312,349) 1,561,983,616 1,295,640,731

17a. Cash on hand and cash balances with Bank of Ghana 2020 2019 GH¢ GH¢ Cash on hand 94,416,351 72,521,797 Balance with Bank of Ghana 546,456,697 484,243,587 640,873,048 556,765,384

17b. Due from banks and other institutions 2020 2019 GH¢ GH¢

Nostro account balances 902,686,159 723,091,266 Items in course of collection 18,850,077 16,096,430 921,536,236 739,187,696

An analysis of changes in the gross carrying amount in relation to cash and cash equivalents is, as follows: The table below shows the credit quality and the maximum exposure to credit risk based on the Bank’s internal credit rating system and year-end stage classification. The amounts presented are gross of impairment allowances.

2020 (GH¢) Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Cash and cash equivalents 1,562,409,284 - - 1,562,409,284 Total 1,562,409,284 - - 1,562,409,284

2020 (GH¢) Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Gross carrying amount as at 1 january 2020 1,295,953,080 - - 1,295,953,080 New assets originated or purchased 1,562,409,284 - - 1,562,409,284 Assets derecognised or repaid (excluding write offs) (1,295,953,080) - - (1,295,953,080) Transfers to stage 1 - - - - Transfers to stage 2 - - - - Transfers to stage 3 - - - - Amounts written off - - - - Total 1,562,409,284 - - 1,562,409,284

61 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

2019 (GH¢) Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Cash and cash equivalents 1,295,953,080 - - 1,295,953,080

Total 1,295,953,080 - - 1,295,953,080

2019 (GH¢) Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Gross carrying amount as at 1 January 2019 642,136,558 - - 642,136,558 New assets originated or purchased 1,295,953,080 - - 1,295,953,080 Assets derecognised or repaid (excluding write offs) (642,136,558) - - (642,136,558) Transfers to stage 1 - - - - Transfers to stage 2 - - - - Transfers to stage 3 - - - - Amounts written off - - - -

Total 1,295,953,080 - - 1,295,953,080

2020 2019 GH¢ GH¢ 17c. Impairment allowance for cash and cash equivalents Opening balance 312,349 300,504 Charge for the year 113,319 11,845 Closing stock of provision 425,668 312,349

2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Individual ECL allowance as at 1 January 2020 312,349 - - 312,349 New assets originated or purchased 425,668 - - 425,668 Assets derecognised or repaid (excluding write offs) (312,349) - - (312,349) Transfers to Stage 1 - - - - Transfers to Stage 2 - - - - Transfers to Stage 3 - - - - Amounts written off - - - -

Total 425,668 - - 425,668

SOCIETE GENERALE GHANA PLC 62 Notes to the Financial Statements cont’d

2019 Stage 1 Stage 2 Stage 3 Total Individual Individual Individual ECL allowance as at 1 January 2019 300,504 - - 300,504 New assets originated or purchased 312,349 - - 312,349 Assets derecognised or repaid (excluding write offs) (300,504) - - (300,504) Transfers to stage 1 - - - - Transfers to stage 2 - - - - Transfers to stage 3 - - - - Amounts written off - - - -

Total 312,349 - - 312,349

18. Non-pledged trading assets 2020 2019 GH¢ GH¢ Government bonds 51,322,316 11,492,432 Treasury bills 16,574,160 46,031,504 67,896,476 57,523,936

18a. Non pledged trading assets 2020 2019 FV FV Through P&L Through P&L GH¢ GH¢ Balance as at 1 January 57,523,936 75,718,494 Additions 68,612,759 57,442,463 Disposals (57,523,936) (75,718,494) Fair value (716,283) 81,473 Balance as at 31 December 67,896,476 57,523,936 None of the financial instruments was pledged as collateral during the year (2019: Nil).

19. Equity investments 2020 2019 GH¢ GH¢ Advans Ghana (Note 19a) 2,951,115 3,254,380 YUP Ghana 9,285,350 5,608,520 Total 12,236,465 8,862,900

2020 2019 GH¢ GH¢ 19a. Advans Ghana Balance as at 1 January 3,254,380 2,519,144 Fair value (303,265) 735,236 2,951,115 3,254,380

63 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

Advans Ghana is a Savings and Loans company which distribution of electronic money. YUP Ghana Limited is specializes in the collection of deposits and giving of fully registered with the Ghana Investment Promotion credits. Societe Generale Ghana has a 10% stake in Centre to enable operations to commence. the ownership of the company. It is an unlisted equity During the year under review, investment which is carried at fair value through profit or loss. During the year, the company‘s operations y In order to comply with the Payment Systems was negatively affected by the impact of Covid 19 which and Services Act, 2019 (Act 987) which requires a resulted in a reduction in its net assets. As a result SG minimum of 30% equity participation of a Ghanaian Ghana‘s investment in Advans Ghana has been fair Company, SG Ghana increased its interest in YUP valued downwards to refect this development. Ghana to 35.6% with SG Group interest reducing to 64.4% (Refer to note note 19) YUP Ghana Limited has been incorporated as a private company limited by shares. The Company was registered y YUP Ghana received the license to commence full with 500,000,000 shares of no par value with Societe operations from the Central Bank of Ghana. Generale Group having a 75% interest and Societe YUP Ghana and Advans Ghana will be held under our Generale Ghana having a 25% interest. The nature of investment company SSBI business the company is authorized to carry on are the

2020 2019 GH¢ GH¢ 20. Loans and advances Overdrafts 534,694,886 708,224,806 Term loans 2,114,641,416 2,052,842,656 Export financing 413,136 367,386 Staff loan 68,657,097 57,972,086 Equipment finance lease 107,362,816 125,018,854 Gross loans and advances (note 20d) 2,825,769,351 2,944,425,788 Amortised cost adjustment (28,334,030) (26,879,968) Interest in suspense (24,898,406) (20,161,132) Less: allowances for impairment (note 20e) (209,830,240) (253,990,687) 2,562,706,675 2,643,394,001

2020 2019 GH¢ GH¢ Loans and advances Current 2,596,040,746 2,647,558,111 Olem 39,977,578 36,803,538 Gross performing loans 2,636,018,324 2,684,361,649 Substandard 26,654,272 31,861,675 Doubtful 35,124,623 73,804,284 Loss 127,972,132 154,398,180 Gross non performing loans 189,751,027 260,064,139 Total gross loans 2,825,769,351 2,944,425,788

SOCIETE GENERALE GHANA PLC 64 Notes to the Financial Statements cont’d

2020 2019 20a. Other statistics i. Loan loss provision ratio 7.43% 8.63% ii. Gross non-performing loan ratio 6.70% 8.83% iii. 50 Largest exposure (gross funded loan and advances to total exposure) 65.50% 63.30% iv. Liquidity ratio 88.27% 67.56% v. Leverage ratio 9.91% 9.30% vi. Off-balance sheet exposures (GH¢ m) 665.07 766.49

2020 2019 GH¢ GH¢ 20b. Analysis by type of customers Individual 833,960,192 813,750,609 Private enterprise 1,486,476,662 1,741,229,727 Public enterprise 219,946,201 118,587,482 Government departments and agencies 219,528,425 212,885,884 Staff 65,857,871 57,972,086 2,825,769,351 2,944,425,788

2020 2019 GH¢ GH¢ 20c. Analysis by industry sector Agriculture, forestry and fishing 340,659,130 479,087,488 Mining and quarrying 52,316,025 163,524,095 Manufacturing 267,007,161 395,559,193 Construction 8,762,270 50,257,690 Electricity, gas and water 148,531,412 190,068,664 Commerce and finance 232,869,730 144,870,077 Transport, storage, communication and services 1,681,204,549 1,440,571,022 Miscellaneous 94,419,074 80,487,559 2,825,769,351 2,944,425,788

65 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

20d. Analysis of gross loans and advances The table below shows the credit quality and the maximum exposure to credit risk based on year-end stage classification. The amounts presented are gross of impairment allowances. 2020 Stage 1 Stage 2 Stage 3 Total Collective Collective Specific Corporate lending 1,772,289,664 21,162,854 95,749,138 1,889,201,656 Retail lending 810,431,147 26,798,374 99,338,174 936,567,695

Gross loan balance 2,582,720,811 47,961,228 195,087,312 2,825,769,351

2019 Stage 1 Stage 2 Stage 3 Total Collective Collective Specific Corporate lending 1,844,755,709 19,681,318 187,753,968 2,052,190,995 Retail lending 793,870,927 22,479,741 75,884,124 892,234,793

Gross loan balance 2,638,626,636 42,161,060 263,638,092 2,944,425,788 An analysis of changes in the gross carrying amount in relation to corporate lending is, as follows:

2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 1,844,755,709 19,681,318 187,753,968 2,052,190,995 New assets originated or purchased 717,863,282 7,410,523 39,859,443 765,133,248 Assets derecognised or repaid (excluding write offs) (769,497,290) (8,166,564) (62,636,601) (840,300,455) Transfers to stage 1 (1,362,818) 1,362,818 - Transfers to stage 2 (8,097,578) 8,097,578 - - Transfers to stage 3 (11,206,974) (7,220,058) 18,427,032 - Amounts written off (164,667) (2,761) (87,654,704) (87,822,132)

Total 1,772,289,664 21,162,854 95,749,138 1,889,201,656

2019 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 904,069,933 26,998,723 270,976,027 1,202,044,683 New assets originated or purchased 1,329,213,328 15,616,945 68,481,171 1,413,311,444 Assets derecognised or repaid (excluding write offs) (374,762,418) (17,362,591) (110,121,736) (502,246,745) Transfers to stage 1 13,575,076 (9,766,551) (3,808,525) - Transfers to stage 2 (9,397,414) 9,397,414 - - Transfers to stage 3 (17,942,796) (5,107,231) 23,050,027 - Amounts written off - (95,391) (60,822,996) (60,918,387)

Total 1,844,755,709 19,681,318 187,753,968 2,052,190,995

SOCIETE GENERALE GHANA PLC 66 Notes to the Financial Statements cont’d

An analysis of changes in the gross carrying amount in relation to Retail lending is, as follows:

2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 793,870,926 22,479,741 75,884,126 892,234,793 New assets originated or purchased 368,034,220 5,653,156 15,732,333 389,419,709 Assets derecognised or repaid (excluding write offs) (318,826,936) (8,585,486) (9,490,791) (336,903,213) Transfers to stage 1 6,220,797 (5,323,516) (897,281) - Transfers to stage 2 (19,411,236) 19,411,236 - Transfers to stage 3 (19,455,240) (6,836,102) 26,291,342 - Amounts written off (1,384) (655) (8,181,555) (8,183,594)

Total 810,431,147 26,798,374 99,338,174 936,567,695

2019 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 688,461,129 20,858,456 54,253,505 763,573,090 New assets originated or purchased 404,341,017 9,980,164 8,777,533 423,098,715 Assets derecognised or repaid (excluding write offs) (272,913,768) (6,434,356) (6,867,673) (286,215,796) Transfers to stage 1 5,834,567 (4,336,713) (1,497,854) - Transfers to stage 2 (11,856,744) 11,856,744 - - Transfers to stage 3 (19,972,800) (7,612,559) 27,585,359 - Amounts written off (22,475) (1,831,995) (6,366,746) (8,221,216)

Total 793,870,927 22,479,741 75,884,124 892,234,793

20e. Analysis of impairment allowances 2020 Stage 1 Stage 2 Stage 3 Total Collective Collective Specific Corporate lending 46,324,999 3,886,871 77,989,000 128,200,870 Retail lending 9,079,967 6,629,403 65,920,000 81,629,370

Gross loan balance 55,404,966 10,516,274 143,909,000 209,830,240

2019 Stage 1 Stage 2 Stage 3 Total Collective Collective Specific Corporate lending 58,137,922 1,075,166 131,541,839 190,754,927 Retail lending 10,471,883 2,635,519 50,128,358 63,235,759

Gross loan balance 68,609,805 3,710,684 181,670,197 253,990,687

67 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

20f. Analysis of impairment allowances 2020 2019 GH¢ GH¢ At 1 January 253,990,687 248,768,249 Loans written off during the year (90,427,001) (55,688,000) 163,563,686 193,080,249 Increase in provision 46,266,554 60,910,438 At 31 December 209,830,240 253,990,687

Impairment allowance for loans and advances to corporate customers 2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 58,137,922 1,075,166 131,541,839 190,754,927 New assets originated or purchased 18,648,333 4,216,353 36,586,000 59,450,686 Assets derecognised or repaid (excluding write offs) (29,575,483) (1,130,862) (3,414,391) (34,120,736) Transfers to stage 1 (224,868) 224,868 - - Transfers to stage 2 (242,927) 242,927 - - Transfers to stage 3 (417,978) (741,581) 1,159,559 - Amounts written off - - (87,884,007) (87,884,007) Total 46,324,999 3,886,871 77,989,000 128,200,870

2019 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 24,877,679 4,794,975 172,373,000 202,045,654 New assets originated or purchased 39,138,238 2,576,796 42,164,000 83,879,034 Assets derecognised or repaid (excluding write offs) (9,411,408) (4,124,354) (30,093,000) (43,628,761) Transfers to stage 1 4,353,619 (1,611,481) (2,742,138) - Transfers to stage 2 (281,922) 281,922 - - Transfers to stage 3 (538,284) (842,693) 1,380,977 - Amounts written off - - (51,541,000) (51,541,000) Total 58,137,922 1,075,166 131,541,839 190,754,927

Impairment allowance for loans and advances to retail customers 2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 10,471,882 2,635,519 50,128,358 63,235,759 New assets originated or purchased 4,508,296 6,167,443 25,765,000 36,440,739 Assets derecognised or repaid (excluding write offs) (7,481,723) 498,953 (8,521,358) (15,504,128) Transfers to stage 1 2,010,756 (1,292,931) (717,825) - Transfers to stage 2 (218,975) 218,975 - - Transfers to stage 3 (210,269) (1,598,556) 1,808,825 - Amounts written off - - (2,543,000) (2,543,000)

Total 9,079,967 6,629,403 65,920,000 81,629,370

SOCIETE GENERALE GHANA PLC 68 Notes to the Financial Statements cont’d

2019 Stage 1 Stage 2 Stage 3 Total Individual Individual Specific Gross carrying amount as at 1 January 2019 3,470,264 11,107,585 32,737,000 47,314,849 New assets originated or purchased 8,150,854 2,337,501 24,447,000 34,935,354 Assets derecognised or repaid (excluding write offs) (2,954,144) (8,101,300) (3,812,000) (14,867,444) Transfers to stage 1 2,214,381 (1,049,182) (1,165,199) - Transfers to stage 2 (130,602) 130,602 - - Transfers to stage 3 (278,870) (1,789,687) 2,068,557 - Amounts written off - - (4,147,000) (4,147,000)

Total 10,471,883 2,635,519 50,128,358 63,235,759

Loan provisioning/impairment are carried out in accordance with Bank of Ghana Policy as well as the principles of IFRS. Loan impairment losses calculated based on IFRS principles are passed through the statement of comprehensive income. Where provisions per IFRS is more than provisions per of Bank of Ghana guidelines, no regulatory credit reserve is required. When the credit loss provision calculated under IFRS principles is less than what is required under the Bank of Ghana, transfers are made from the income surplus account into the non- distributable regulatory credit reserves. 2020 2019 GH¢ GH¢ Provisions per Bank of Ghana guidelines 157,495,753 214,168,993 Provisions per IFRS 209,830,240 258,612,542 No credit risk reserve was made in 2019 and 2020 as IFRS provision is greater than provision under Bank of Ghana guidelines. 21. Investment securities 2020 2019 Debt instruments measured at amortised cost 427,587,822 83,104,992 Debt instruments measured at Fair value through OCI 108,961,776 - 536,549,598 83,104,992

GH¢ GH¢ GH¢ GH¢ 21a. Debt instruments Debt instruments Debt instruments Debt instruments measured at measured at Fair value measured at measured at Fair value amortised cost through OCI amortised cost through OCI

Cost 428,091,754 107,180,571 83,104,992 - Fair value 1,781,205 - - Less impairment (503,932) - - -

427,587,822 108,961,776 83,104,992 -

Lien on investment securities Included in debt instruments measured at amortised cost is an amount of GH¢20million placed with the Bank of Ghana (BoG) by Societe Generale Ghana Plc as integrity capital as part of the requirement for a Dedicated Electronic Money Issuer (DEMI) licence for YUP Ghana, an associated company of Societe Generale Ghana Plc. The said amount has been invested by the Bank of Ghana (BoG) in a 5 year Bond bearing an interest of 21.5% per annum and is expected to mature in March 2025. The aforementioned and its accrued interest is a regulatory requirement and may only be made available to Societe Generale Ghana Plc in the instances where the licence is cancelled, expired or revoked and after all the liabilities held by YUP Ghana Limited has been settled.

69 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

Debt instruments measured at amortised cost The table below shows the credit quality and the maximum exposure to credit risk and year-end stage classification. The amounts presented are gross of impairment allowances.

2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Government Bills and Bonds 427,587,822 - - 427,587,822

Total exposure 427,587,822 - - 427,587,822

An analysis of changes in the gross carrying amount and year-end stage classification is, as follows: Stage 1 Stage 2 Stage 3 Total Individual Individual Collective Gross carrying amount as at 1 January 2020 83,104,992 - - 83,104,992 New assets originated or purchased 437,338,770 - - 437,338,770 Assets derecognised or matured (excluding write offs) (92,855,940) - - (92,855,940) Transfers to stage 1 - - - - Transfers to stage 2 - - - - Transfers to stage 3 - - - - Amounts written off - - - -

Total 427,587,822 - - 427,587,822 Impairment allowance for debt instruments measured at amortised cost

2020 Stage 1 Stage 2 Stage 3 Total Individual Individual Individual ECL allowance as at 1 January 2020 - - - - New assets originated or purchased (503,932) - - (503,932) Assets derecognised or repaid (excluding write offs) - - - - Transfers to stage 1 - - - - Transfers to stage 2 - - - - Transfers to stage 3 - - - - Amounts written off - - - -

Total (503,932) - - (503,932)

2019 Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Government bills and bonds 83,104,992 - - 83,104,992

Total exposure 83,104,992 - - 83,104,992

SOCIETE GENERALE GHANA PLC 70 Notes to the Financial Statements cont’d

An analysis of changes in the gross carrying amount and year-end stage classification is, as follows: Stage 1 Stage 2 Stage 3 Total Individual Individual Collective Gross carrying amount as at 1 January 2019 691,417,274 - - 691,417,274 New assets originated or purchased 46,591,281 - - 46,591,281 Assets derecognised or matured (excluding write offs) (654,903,562) - - (654,903,562) Transfers to stage 1 - - - - Transfers to stage 2 - - - - Transfers to stage 3 - - - - Amounts written off - - - -

Total 83,104,992 - - 83,104,992

Impairment allowance for debt instruments measured at amortised cost Instruments under this category were issued by the central bank and government. Impairment for these instruments were assessed to be insignificant in 2019.

22. Property, plant and equipment 2020 2019 GH¢ GH¢ Property, plant and equipment (22b) 290,748,100 290,868,619

290,748,100 290,868,619

22a. Depreciation and amortization 2020 2019 GH¢ GH¢ Property, plant and equipment (22b) 32,459,174 31,877,648 Intangible assets (23) 1,128,990 1,303,033

33,588,164 33,180,681

22b. Property, plant and equipment

2020 Land & Right of Use Computers Furniture & Motor Assets in Total Building Assets Equipment Vehicles Course of Construction GH¢ GH¢ GH¢ GH¢ GH¢ GH¢ GH¢ Cost/valuation Balance as at 1 January 79,832,821 203,966,119 21,868,925 49,743,300 8,621,695 22,939,034 386,971,894 Additions 184,493 13,108,407 947,679 1,736,399 353,400 16,011,855 32,342,233 *Transfers 1,046,506 39,709 - 612,615 - (1,698,830) - Write offs - - - - - (3,577) (3,577) Disposal ------

Balance as at 31 December 81,063,820 217,114,235 22,816,604 52,092,314 8,975,095 37,248,482 419,310,550

71 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

2020 Land & Right of Use Computers Furniture & Motor Assets in Total Building Assets Equipment Vehicles Course of Construction Depreciation GH¢ GH¢ GH¢ GH¢ GH¢ GH¢ GH¢ Balance as at 1 January 22,482,411 15,027,290 19,966,852 32,597,788 6,028,935 - 96,103,276 Charge for the year 6,862,604 16,695,061 1,135,928 6,031,760 1,733,821 - 32,459,174 *Transfers (1,064,311) 1,064,311 - - - - - Disposal ------

Balance as at 31 December 28,280,704 32,786,662 21,102,780 38,629,548 7,762,756 - 128,562,450 NBV as at 31 December 2020 52,783,116 184,327,573 1,713,824 13,462,766 1,212,339 37,248,482 290,748,100

2019 Cost/valuation Balance as at 1 January 258,808,734 - 20,744,290 45,584,312 8,201,773 25,743,835 359,082,944 Transfers: - From land & building (184,159,794) 179,141,922 - - - - (5,017,872) From Other assets to ROUA - 11,784,937 - - - - 11,784,937

Balance after IFRS 16 application 74,648,940 190,926,859 20,744,290 45,584,312 8,201,773 25,743,835 365,850,009 Additions 202,085 7,133,570 790,815 1,419,031 197,245 12,372,986 22,115,732 Transfers 4,981,797 5,905,691 333,819 2,782,917 943,359 (15,177,787) (230,204) Disposal - - - (42,961) (720,683) - (763,644)

Balance as at 31 December 79,832,821 203,966,119 21,868,925 49,743,300 8,621,695 22,939,034 386,971,894

Depreciation Balance as at 1 January 21,404,945 - 18,574,988 25,917,438 3,971,457 - 69,868,828 Charge for the year 6,095,339 15,027,290 1,391,864 6,723,311 2,639,845 - 31,877,648 Transfers ------(5,017,873) Disposal - - (42,961) (582,367) - (625,328)

Balance as at 31 December 22,482,411 15,027,290 19,966,852 32,597,788 6,028,935 - 96,103,276 NBV as at 31 December 2019 57,350,411 188,938,830 1,902,072 17,145,512 2,592,760 22,939,034 290,868,619

SOCIETE GENERALE GHANA PLC 72 Notes to the Financial Statements cont’d

23. Intangible assets 2020 2019 GH¢ GH¢ Computer software Cost Balance as at 1 January 21,201,601 20,538,987 Additions 664,895 432,411 Transfers of asset in course of construction Note 22b - 230,203 Balance as at 31 December 21,866,496 21,201,601 Amortisation Balance as at 1 January 19,473,036 18,170,003 Charge for the year 1,128,990 1,303,033 Balance as at 31 December 20,602,026 19,473,036 Carrying amount 1,264,470 1,728,565 31 December 1,264,470 1,728,565 The amortization periods and key factors considered in determining the useful life are the same as disclosed in note 2.8 above.

24. Current Tax: assets/liabilities 2020 2019 GH¢ GH¢ Corporate tax (note 24a) (24,680,582) (35,602,172) National stabilization levy (note 24b) (1,071,942) (149,158) (25,752,524) (35,751,330)

24a. Corporate tax 2020 2019 GH¢ GH¢ Balance as at 1 January (35,602,172) 1,425,257 Charge to statement of profit or loss and other comprehensive income (71,823,122) (74,434,446) Payment/credit during the year 82,744,712 37,407,017 Balance as at 31 December (24,680,582) (35,602,172)

24b. National stabilization levy 2020 2019 GH¢ GH¢ Balance as at 1 January (149,158) 457,509 Charge to statement of profit or loss and other comprehensive income (11,081,502) (8,834,567) Payment/credit during the year 10,158,718 8,227,900 Balance as at 31 December (1,071,942) (149,158)

73 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

The levy charged on the profit is based on a rate of 5% . In accordance with the National Fiscal Stabilization Act, 2013, (Act 862) all companies in Banking, Non Bank Financial Institutions, Insurance, Mining, Brewery and Communication are supposed to pay a levy of 5% of profit before tax towards National Fiscal Stability .

25. Other assets 2020 2019 GH¢ GH¢ Stationery and consumable stocks 151,806 195,890 Prepayments and sundry debtors (25a) 66,308,069 62,268,706 Accrued income 51,644 49,639 66,511,519 62,514,235

25a. Prepayments and sundry debtors GH¢ GH¢ Deferred cost 1,343,217 597,407 Unpaid customer charges 6,569,231 6,424,041 Deferred staff cost 14,209,047 13,018,272 Rent prepayment 536,954 279,782 Medical prepayment 3,070,767 2,855,837 Bills payment 3,590,921 378,368 Other sundry debtors & prepayment 36,987,932 38,714,999 66,308,069 62,268,706

26. Borrowings 2020 2019 GH¢ GH¢ Socgen borrowing 318,912,566 116,367,859 European international bank 22,480,716 27,763,111 Proparco 24,873,505 33,191,271 Edaif managed fund - 373,736 366,266,787 177,695,977 The Bank has not had any defaults of principal, interest or other breaches with regard to any liabilities during 2020 or 2019.

Summary of borrowing arrangements up to 50% of the banks capital expenditure intended Societe de Promotion et de Participation pour la to develop the bank’s intermediation capacities (such Cooperation Economique (PROPARCO): This is a USD 30 as developing its branch network, IT Systems, training million long-term credit line (‘the facility’) granted to the etc.) and for financing eligible Private Sector Small bank. The first draw down of USD 6 million has a fixed and Medium Sized Enterprises. The interest rate on the interest rate of 5.12% and matured on 30 April 2020. The drawn portion is fixed at 5.422% and matures on 1 April second draw down of USD 4 million has a fixed interest 2024. As at 31 December 2020 the outstanding balance rate of 5.19% and matured on 30 April 2020. The third is € 3.85 million draw down was EUR7.5 million. The related interest rate is 6-months Libor plus a margin of 370 basis points and SocGen Borrowing : The bank took two facilitities from will mature on 30 April 2024. As at 31 December 2020 the group. The first one is a $ 65.8 million renewabIe the amounts outstanding is € 3.5 million 1 year credit line.The second is a 7 year loan facility of $55m at Libor 3-months plus a margin of 376 basis European Investment Bank (EIB): This is a € 20 million points and will mature in 4 May 2027. As at 31 December credit facility extended to the bank by EIB. The loan could 2020 the total amount outstanding was $ 55.4 million be drawn in EUR and/or USD and to be used to finance

SOCIETE GENERALE GHANA PLC 74 Notes to the Financial Statements cont’d

27. Deposit from customers 2020 2019 GH¢ GH¢ Retail customers

Term deposits 436,274,367 366,448,925 Current deposits 818,411,367 670,506,185 Savings deposits 524,037,991 403,370,000

Corporate customers Term deposits 224,964,145 285,864,661 Current deposits 1,475,797,067 1,441,773,443 Savings deposits 1,858,384 1,742,757 Interest payable on deposits Deposits from customers 3,481,343,321 3,169,705,971 Deposits from banks 3,945,938 25,675,390 3,485,289,259 3,195,381,361

27a. Analysis by type of deposits 2020 2019 GH¢ GH¢ Financial institutions 48,601,920 30,659,804 Individuals and other private enterprise 3,422,906,822 3,085,206,185 Government departments and agencies 2,858,513 8,253,547 Public enterprises 10,922,004 71,261,825 3,485,289,259 3,195,381,361 20 Largest depositors to total deposit ratio 24.30% 30.85%

28. Other liabilities 2020 2019 GH¢ GH¢ Creditors 32,841,345 34,595,186 Other creditors and provisions (28a) 88,753,380 52,654,313 Accruals (28b) 190,708,168 145,869,611 312,302,893 233,119,110

75 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

28a. Other creditors and provisions 2020 2019 GH¢ GH¢ Payment orders 7,394,104 5,377,101 Statutory deductions 2,406,032 2,147,858 Uncleared effects (28c) 58,379,042 27,464,990 Other commitments & credit balances 9,444,919 8,529,756 Staff related provisions (28d) 2,537,000 - Off balance sheet provisions 3,827,276 4,309,505 Other provisions (28d) 4,765,007 4,825,103 88,753,380 52,654,313

28b. Accruals 2020 2019 GH¢ GH¢ Staff & related accruals 5,868,608 7,179,140 Audit fees 229,267 590,512 Software maintenance 78,086,122 52,605,612 IT, marketing & other shared services 67,812,265 60,996,196 Other accruals 38,711,906 24,498,151 190,708,168 145,869,611

28c. Uncleared effects This comprises uncleared balances on customer and balances on customer transit accounts pending onward transfers

Aging analysis of uncleared effect 2020 2020 2020 2020 Below 3 3 to 6 6 to 12 Above 1 Total months months months year GH¢ GH¢ GH¢ GH¢ GH¢ Uncleared effect 58,379,042 55,134,614 896,557 2,263,411 84,460

2019 2019 2019 2019 Below 3 3 to 6 6 to 12 Above 1 Total months months months year GH¢ GH¢ GH¢ GH¢ GH¢ Uncleared effect 27,464,990 23,556,223 1,989,351 1,095,725 823,690

SOCIETE GENERALE GHANA PLC 76 Notes to the Financial Statements cont’d

28d. Provisions 2020 Other Provisions Staff Provisions Total GH¢ GH¢ GH¢ As at 1 January 2020 4,825,103 - 4,825,103 Provisions made during the year 2,537,000 2,809,391 Provisions reversed during the year (332,487) - (332,487)

As at 31 December 2020 4,765,007 2,537,000 7,302,007

2019 As at 1 January 2019 9,577,617 - 9,577,617 Provisions made during the year 2,582,834 3,242,121 5,824,955 Provisions reversed during the year (7,335,348) (3,242,121) (10,577,469)

As at 31 December 2019 4,825,103 - 4,825,103

29. Stated capital 2020 2019 a. Authorised ordinary shares Number of ordinary shares of no par value 1,000,000,000 1,000,000,000

2020 2019 b. Issued and fully paid ordinary shares Number Amount Number Amount GH¢ GH¢ Issued and fully paid ordinary shares 709,141,367 404,245,427 709,141,367 404,245,427

30. Dividend declared and paid 2020 2019 GH¢ GH¢ Equity dividend on ordinary shares: Dividend declared 31,911,361 28,365,655 Dividend paid during the year (31,911,361) (28,365,655) Balance as at 31 December - - Dividends are treated as appropriation of profit in the year of approval by shareholders.

31. Related party transactions / disclosures b. A collateral provided will be evaluated on the same A number of banking transactions were entered into with terms and procedures normally required by the Bank related parties in the normal course of business. These for any other person to whom a credit facility is given include loans and placements. Loans to related parties is c. The terms and conditions of the credit facility are done at arm’s length and approved by the highest approving not less favourable to the Bank than those normally authority as spelt out in the Banks and Specialized Deposit offered to other persons and Taking Institutions Act, 2016 (Act 930). d. The granting of the credit facility is in the interest of a. The person to whom the credit facility is given has the bank. credit worthiness which is not less than that normally required by the Bank or other persons to whom credit The credit facility shall be approved by the Board of facilities are given. Directors.

77 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

During the year the following transactions were performed with related parties: a. Interest paid and interest received from related parties during the year

2020 2019 Interest Paid Interest Interest Paid Interest Received Received GH¢ GH¢ GH¢ GH¢ Societe Generale borrowing 10,670,773 137,705 8,443,289 88,615

b. Related party balances at December Lending to related parties: 2020 2019 GH¢ GH¢ Officers and employees other than Directors 68,657,096 57,972,086 Nostro account balances with Societe Generale Group 783,910,594 628,198,392

c. Loans to Directors There were no loans to directors during the period.

d. Controlling relationship Societe Generale Group is related by virtue of its ultimate (100%) controlling interest in SG Financial Services Holding, which has significant controlling interest in the shareholding in Societe Generale Ghana PLC.

32. Contingent liabilities

32a. Breakdown of contingent liabilities 2020 2019 GH¢ GH¢ Guarantees and indemnities 195,746,677 228,593,438 Letters of credit & others 126,073,791 116,796,169 Other undrawn commitments 70,176,925 215,719,434 Spot and forward purchase 273,077,597 205,383,248 665,074,990 766,492,290

To meet the financial needs of customers, the Bank enters letters of credit carry a similar credit risk to loans. The into various irrevocable commitments and contingent nominal values of such commitments are listed below. liabilities. These consist of financial guarantees, letters of credit and other commitments to lend. Even though these Impairment losses on guarantees and other obligations may not be recognised on the statement of commitments financial position, they contain credit risk and,therefore, An analysis of changes in the gross carrying amount and form part of the overall risk of the Bank. the corresponding allowance for impairment losses in relation to guarantees and other commitments is, as Letters of credit and guarantees (including standby letters follows: of credit) commit the Bank to make payments on behalf of customers in the event of a specific act, generally related Financial guarantees to the import or export of goods. Guarantees and standby The table below shows the credit quality and the maximum exposure and year-end stage classification

SOCIETE GENERALE GHANA PLC 78 Notes to the Financial Statements cont’d

Stage 1 Stage 2 Stage 3 Total Individual Individual Individual Financial guarantees 665,074,990 - - 665,074,990 Total outstanding exposure 665,074,990 - - 665,074,990 An analysis of changes in the gross carrying amount in relation to contingent liabilities is, as follows:

Stage 1 Stage 2 Stage 3 Total Individual Individual Collective Gross carrying amount as at 1 January 2020 766,492,290 - - 766,492,290 New assets originated or purchased 623,662,359 - 623,662,359 Assets derecognised or matured (excluding write offs) (725,079,659) - (725,079,659) Transfers to stage 1 - - - Transfers to stage 2 - - - Transfers to stage 3 - - - Amounts written off - - Total outstanding exposure 665,074,990 - - 665,074,990

32b. Impairment allowance for contingent liabilities 2020 2019 GH¢ GH¢ Opening balance 4,309,506 5,959,016 Charge for the year (482,230.00) (1,649,511) Closing stock of provision 3,827,276 4,309,506

Stage 1 Stage 2 Stage 3 Total Individual Individual Collective Gross carrying amount as at 1 January 2019. 4,309,506 - - 4,309,506 New assets originated or purchased - - - - Assets derecognised or matured (excluding write offs) (482,230) - (482,230) Transfers to stage 1 - - - Transfers to stage 2 - - - Transfers to stage 3 - - - Amounts written off - - - At 31 December 2020 3,827,276 - - 3,827,276

79 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

33. Legal liability 34. Analysis of financial assets and liabilities Litigation is a common occurrence in the Banking Financial assets and liabilities are measured on an on- industry due to the nature of the business undertaken. going basis either at fair value or at amortized cost. The The Bank has formal controls and policies for managing principal accounting policies in Notes 2 describe how legal claims. Once professional advice has been obtained the classes of financial instruments are measured and and the amount of loss reasonably estimated, the Bank how income and expenses, including fair value gains makes adjustments to account for any adverse effects and losses, are recognized. The following table analyses which the claims may have on its financial standing. At the financial assets and liabilities in the statement year-end, the Bank had several unresolved legal claims. of financial position by class of financial instrument to which they are assigned, and therefore by the Adequate provision has been made for all the relevant measurement basis: litigation for which losses may be probable. The probable outfow which could result from all such litigation, based on the current status of the various legal proceedings, is estimated to be no more than GH¢ 2,033,800 while the timing of the outfow is uncertain.

Loan and Debt Debt Total Carrying Advances at Instrument Instrument Amount 31 December 2020 Financial As- amortised Designated at at amortised sets at FVPL cost FVOCI cost

Financial assets GH¢ GH¢ GH¢ GH¢ GH¢ Cash & cash equivalents - 1,561,983,616 - - 1,561,983,616 Non-pledged trading assets 67,896,476 - - - 67,896,476 Investment securities - - 108,961,776 427,587,822 536,549,598 Loans and advances to customers - 2,562,706,675 - - 2,562,706,675 Investments (other than securities) 12,236,465 - - - 12,236,465 Other assets - 66,511,519 - - 66,511,519 Total financial assets 80,132,941 4,191,201,810 108,961,776 427,587,822 4,807,884,349 Total non-financial assets 307,322,003 Total assets 5,115,206,352

Financial Total Liabilities Carrying Measured at Amount Amortised Cost GH¢ GH¢ Financial liabilities Deposits from banks and customers 3,485,289,259 3,485,289,259 Borrowings 366,266,787 366,266,787 Other liabilities 338,055,417 338,055,417 Total financial liabilities 4,189,611,463 4,189,611,463 Total non-financial liabilities 925,594,889 Total liabilities and shareholders fund 5,115,206,352

SOCIETE GENERALE GHANA PLC 80 Notes to the Financial Statements cont’d

Loan and Equity Debt Total Carrying Advances at Instrument Instrument Amount 31 December 2019 Financial As- amortised Designated at at amortised sets at FVPL cost FVOCI cost

Financial liabilities GH¢ GH¢ GH¢ GH¢ GH¢ Cash & cash equivalents - 1,295,640,731 - - 1,295,640,731 Non-pledged trading assets 57,523,936 - - - 57,523,936 Investment securities - - - 83,104,992 83,104,992 Loans and advances to customers - 2,643,394,001 - - 2,643,394,001 Investments (other than securities) 8,862,900 - - - 8,862,900 Other assets - 62,514,235 - - 62,514,235 Total financial assets 66,386,836 4,001,548,967 - 83,104,992 4,151,040,795 Total non-financial assets 292,868,414 Total assets 4,443,909,209 The fair values approximates their carrying amounts. Hence no further disclosure on fair values.

Financial Total Liabilities Carrying Measured at Amount Amortised Cost GH¢ GH¢ Financial liabilities Deposits from banks and customers 3,195,381,361 3,195,381,361 Borrowings 177,695,977 177,695,977 Other liabilities 233,119,110 233,119,110 Total financial liabilities 3,606,196,448 3,606,196,448 Total non-financial liabilities 837,712,761 Total liabilities and shareholders fund 4,443,909,209

35. Determination of fair value and fair values hierarchy managers and assets that are valued using the Bank’s the following hierarchy for determining and disclosing own models whereby the majority of assumptions are the fair value of financial instruments by the valuation market observable. technique: Non-market observable inputs means that fair values y Level 1: Quoted (unadjusted) prices in active are determined in whole, or in parts, using a valuation markets for identical assets or liabilities technique, based on assumptions that are neither supported by prices from observable current market y Level 2: Other techniques for which all inputs have transactions in the same instrument, nor are they a significant effect on the recorded fair based on available market data. The main asset classes y Level 3: Techniques for which inputs have a in this category are unlisted equity investments and significant effect on the recorded fair value that are debt instruments. Valuation techniques are used to not based on observable market data. the extent that observable inputs are not available, thereby allowing for situations in which there is little, Financial assets and liabilities measured using a if any, market activity for the asset or liability at the valuation technique based on assumptions that are measurement date. Therefore, observable inputs refect supported by prices from observable current market the Bank’s own assumption about the assumptions transactions are assets and liabilities for which pricing is that market participants will use in pricing the asset obtained via pricing services, but where prices have not or liability (including assumptions about risk). These been determined in an active market, financial assets inputs are developed based on the best information with fair values based on broker codes, investment in available which might include the Bank’s own data. private equity funds with fair values obtained via fund

81 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy done on a recurring basis. Note Level 1 Level 2 Level 3 Total 31 December 2020 GH¢ GH¢ GH¢ GH¢ Non-pledged trading assets 18 - 67,896,476 - 67,896,476 Equity investment 19 - 12,236,465 - 12,236,465 Derivative financial assets - - - - land and building - 237,110,689 237,110,689 - 80,132,941 237,110,689 317,243,630

31 December 2019 Non-pledged trading assets 18 - 57,523,936 - 57,523,936 Equity investment 19 - 8,862,900 - 8,862,900 Derivative financial assets - - - - land and building - - 246,289,239 246,289,239 - 66,386,836 246,289,239 312,676,075 There were no transfers between levels 1 and 2 within the period.

Level 2 valuation technique those business risks through the Bank’s strategic The assets in Level 2 comprise mainly Government of planning process. Ghana securities (Treasury Bills). They are valued using published results of tender for government of Ghana Risk management structure and Bank of Ghana bill, notes and bonds at the financial The Board of Directors is ultimately responsible for year end. identifying and controlling risks. However, there are separate independent bodies responsible for managing Level 3 valuation technique and monitoring risks. The assets in Level 3 comprise revaluation gain on the Board of Directors Bank’s fixed assets. Fair value of the properties was The Board of Directors is responsible for the overall determined using the market comparable method. The risk management approach and for approving the risk valuations have been performed by the valuer and are management strategies and principles. based on proprietary databases of prices of transactions for properties of similar nature, location and condition. Risk committees The Risk Committees have the overall responsibility 36. Financial risk management for the development of the risk strategy and Risk is inherent in the Bank’s activities but is implementing principles, frameworks, policies and managed through a process of ongoing identification, limits. The Risk Committees are responsible for measurement and monitoring, subject to risk limits managing risk decisions and monitoring risk levels. The and other controls. This process of risk management is main Risk Committees and its frequency of meetings critical to the Bank’s continuing profitability and each are: individual within the Bank is accountable for the risk i. Credit Risk Committee - Quarterly; exposures relating to his or her responsibilities. ii. Asset and Liabilities Committee - Weekly; The Bank is exposed to credit risk, liquidity risk, interest rate risk and market risk. It is also subject to various iii. Structural Risk Committee - Quarterly; operating risks. iv. Market Risk Committee - Quarterly; The independent risk control process does not include business risks such as changes in the environment, v. Operational Risk Committee (Periodic and technology and industry. The Bank’s policy is to monitor Permanent Control, Business Continuity Planning and Compliance) - Quarterly.

SOCIETE GENERALE GHANA PLC 82 Notes to the Financial Statements cont’d

Risk management correctly handled, secure and valid. It is based on day- Risk Management is done under specialists units of to-day security, which is everyone’s responsibility and Credit and Market Risk Department and Operational on formal supervision carried out by management. and Permanent Control Division. These units are Periodic control activities are performed by dedicated responsible for implementing and maintaining risk and specialized teams of auditors which are independent related procedures to ensure independent control from the operational entities. The scope of Periodic process is maintained.Societe Generale Ghana Risk is Controls encompasses all the bank’s activities and can managed through a process of ongoing identification, focus on any aspect of these activities, without any measurement and monitoring, subject to risk limits and restrictions. other controls. This process of risk management is critical to the Bank’s continuing profitability and each individual within the Internal audit The Bank’s policy is that risk management processes Bank is accountable for the risk exposures relating to throughout the Bank are audited annually by the internal his or her responsibilities. The Bank is exposed to credit audit function, which examines both the adequacy risk, liquidity and interest rate risk and market risk. It is of the procedures and the Bank’s compliance with also subject to various operating risks. The independent the procedures. Internal Audit discusses the results risk control process does not include business risks of all assessments with management, and reports its such as changes in the environment, technology and findings and recommendations to the Audit Committee. industry. The Bank’s policy is to monitor those business risks through the Bank’s strategic planning process. The most significant risks which the bank is exposed to and how they are managed are as below: Risk control Risk Control is done under the various specialist units Credit risk of Risk Management where monitoring of compliance Credit risk is the risk that the Bank will incur a loss with risk principles, policies and limits across the Bank because its customers or counterparties fail to discharge is undertaken. Each business group has its own unit their contractual obligations. which is responsible for the independent control risks, including monitoring the risk of exposures against The Bank manages and controls credit risk by setting limits and the assessment of risks of new products and limits on the amount of risk it is willing to accept for structured transactions. These units also ensure the individual counterparties and for geographical and complete capture of the risk in risk measurement and industry concentrations, and by monitoring exposures reporting systems through the various committees to in relation to such limits. the Board. The Bank also manages its counter party risk through adherence to Bank of Ghana prudential requirements by Bank treasury ensuring that it’s secured lending to any single borrower The Bank’s Treasury is responsible for managing the is below 25% of its net worth and that any single Bank’s assets and liabilities and the overall financial unsecured lending by the bank is less than 10% of the structure. It is also primarily responsible for the funding bank’s net worth. and liquidity risks management of the Bank. The framework for managing this risk is the credit policy Internal control systems which spells out the overall underwriting standards, The bank has in place internal control systems credit approval process, credit administration and and mechanisms aimed at ensuring that legal and recovery processes. The policy is reviewed from time to regulatory provisions, ethics, and professional practices time (at least yearly) in response to risk profile of new are complied with, internal processes of the bank are business opportunities/products, and any challenges functioning properly and the financial information are with the recovery process. reliable. The system is particularly designed to identify The Bank has established a credit quality review malfunctions and irregularities, to efficiently control process through the Credit Committee to provide risks, and to make sure that information systems are early identification of possible changes in the reliable. Internal control system distinguishes two levels creditworthiness of counterparties, including regular of control: Permanent Control which forms the first level collateral revisions. Counterparty limits are established of control and Periodic Controls as a second level of by the use of a credit risk classification system, which control. assigns major counterparty a risk rating. Permanent Control is essential for the bank’s internal control structure and is defined as all procedures implemented on a permanent basis to guarantee that operations carried out on an operational level are

83 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

Risk ratings are subject to regular revision. credit losses, counterparty limits are established by the use of a credit risk classification system, which assigns The credit quality review process aims to allow the major counterparties a risk rating. Risk ratings are Bank to assess the potential loss as a result of the risks subject to regular revision. to which it is exposed and take corrective action. The credit quality review process aims to allow the The Bank’s credit quality review process is established bank to assess the potential loss as a result of the risks to in line with the Societe Generale Group’s risk which it is exposed and take corrective action. management governance based on the following; The Credit Committee also monitors the portfolio of y A strong managerial involvement throughout the loans and debt collection operations. entire organization: From the Board of Directors through to the Credit Committee and to the y analyze the portfolio of loans: retail customers, operational field management teams. companies, banks and financial institutions and sovereign, y A tight framework of internal procedures and guidelines. y monitor irregular commitments and the main sensitive risks, y A well defined permanent supervision process that assists to identify through a self examination the y monitor debt collection files, need for review of certain processes to improve on y assess guarantees and monitor provisions, the Bank’s credit delivery and collection processes. y ensure that the actions reported are monitored y Independence of Risk assessment department and performed from the business divisions; Using provisions made on facilities above 90 days, the y A consistent approach to risk assessment and credit risk exposure for the bank is considered to be monitoring applied throughout the Group. stable over a three year period. The bank in estimating and establishing its potential

Maximum credit exposure 2020 2019 GH¢ GH¢ Due from bank and other financial institution 921,536,236 739,187,696 Non-pledged trading assets 67,896,476 57,523,936 Debt instruments at amortised cost 427,587,822 83,104,992 Loans and advances 2,825,769,351 2,944,425,788 Unsecured contingent liabilities and commitments 665,074,990 766,492,290 4,907,864,875 4,590,734,702

Fair value of collateral held The Bank holds collateral against loans and advances to customers in the form of mortgage interests over property, other registered securities over assets, and guarantees. Estimates of fair value are based on the value of collateral assessed at the time of borrowing, and generally are not updated except when a loan is individually assessed as impaired. An estimate of the fair value of collateral and other security enhancements held against financial assets is shown below:

2020 2019 GH¢ GH¢ Against impaired assets 299,019,226 574,949,924 Against past due but not impaired assets 75,009,807 29,275,047 374,029,033 604,224,971

SOCIETE GENERALE GHANA PLC 84 Notes to the Financial Statements cont’d

Liquidity risk and structural interest rate risk Liquidity risk Liquidity risk arises from the mismatch of the timing of cash fows relating to assets and liabilities. The liquidity policy of the Bank is approved by the Board under guidelines issued by Societe Generale Group and monitored daily to ensure that its funding requirements can be met at all times and that a stock of high quality liquid assets is maintained. The net liquidity gap resulting from liquidity analysis of assets and liabilities of the Bank as of 31 December 2020 is shown in the table below. Maturity analysis of assets and liabilities The table shows a summary of assets and liabilities analysed according to their undiscounted contractual terms of the transactions and models of historic client behaviour as well as conventional assumptions for some balance sheet items.

Below 3 3 to 6 6 to 12 Above 1 As at 31 December 2020 Total months months months year GH¢ GH¢ GH¢ GH¢ GH¢ Assets Cash and cash equivalents 1,561,983,616 1,561,983,616 - - - Non-pledged trading assets 67,896,476 67,896,476 - - - Debt instruments at fair value through other comprehensive income 108,961,776 - - - 108,961,776 Investment securities 427,587,822 353,201,522 13,109,189 29,284,201 31,992,910 Loans and advances to customers 2,562,706,675 435,599,801 454,323,741 422,650,850 1,250,132,283 Equity investments 12,236,465 - - - 12,236,465 Other assets 66,511,519 41,499,925 19,453,462 5,558,132 Property, plant and equipment 290,748,100 - - - 290,748,100 Intangible assets 1,264,470 - - - 1,264,470 Deferred tax assets 15,309,433 15,309,433 - - - Total assets 5,115,206,352 2,504,991,350 487,034,445 456,849,171 1,666,331,386

Liabilities Deposits from banks 3,945,938 3,945,938 - - - Deposits from customers 3,481,343,321 990,495,465 641,908,961 458,440,299 1,390,498,596 Borrowings 366,266,787 3,168,110 3,214,257 6,382,367 353,502,054 Current tax liabilities 25,752,524 25,752,524 - - - Other liabilities 312,302,893 93,690,868 93,690,868 124,921,157 - Total liabilities 4,189,611,463 1,117,052,905 738,814,085 589,743,822 1,744,000,650 Net liquidity gap 925,594,889 1,387,938,444 (251,779,641) (132,894,651) (77,669,264) Contingent liabilities 665,076,000 447,272,834 101,719,762 89,965,055 26,118,349

85 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

Below 3 3 to 6 6 to 12 Above 1 As at 31 December 2019 Total months months months year GH¢ GH¢ GH¢ GH¢ GH¢ Assets Cash and cash equivalents 1,295,640,731 1,295,640,731 - - - Non-pledged trading assets 57,523,936 57,523,936 - - - Investment securities 83,104,992 68,076,322 1,296,058 4,512,754 9,219,858 Loans and advances to customers 2,643,394,001 617,908,437 277,294,575 401,872,213 1,346,318,776 Equity investments 8,862,900 - - - 8,862,900 Other assets 62,514,235 43,760,159 12,502,717 6,251,359 - Property, plant and equipment 290,868,619 - - - 290,868,619 Intangible assets 1,728,565 - - - 1,728,565 Deferred tax assets 271,230 271,230 - - - Total assets 4,443,909,209 2,083,180,815 291,093,350 412,636,326 1,656,998,718

Liabilities Deposits from banks 25,675,390 25,675,390 - - - Deposits from customers 3,169,705,971 1,213,120,562 399,472,352 404,940,300 1,152,172,757 Borrowings 177,695,977 144,504,706 33,191,271 - - Other liabilities 233,119,110 139,613,341 69,935,733 23,570,036 - Deferred tax liabilities 35,751,330 35,751,330 - - - Total liabilities 3,641,947,778 1,558,665,329 502,599,356 428,510,336 1,152,172,757 Net liquidity gap 801,961,431 524,515,486 (211,506,006) (15,874,010) 504,825,961 Contingent liabilities 766,492,290 595,217,953 31,949,919 124,708,771 14,615,647

The gap profile is the difference between assets and liabilities which is calculated for each time- bucket. The results of this calculation are stressed and analysed through the internal ALM Report or the Group report Structural risk committee. Societe Generale Ghana PLC has a large and diversified deposit base which serves as a large part of mid and long-term financing resources.

Contractual maturities of undiscounted cash flows of financial assets and liabilities The table shows a summary of financial assets and liabilities analysed according to their undiscounted contractual terms of the transactions and models of historic client behaviour (models determined with the contribution of the Group), as well as conventional assumptions for some balance sheet items.

As at 31 December 2020 Below 3 3 to 6 6 to 12 Above 1 Total months months months year GH¢ GH¢ GH¢ GH¢ GH¢ Financial assets Cash and cash equivalents 1,561,983,616 1,561,983,616 - - Non-pledged trading assets 67,896,476 67,896,476 - - 108,961,776 - - 108,961,776 Investment securities 488,740,938 437,006,335 15,150,438 33,049,554 3,534,611 Loans and advances to customers 2,859,413,075 451,684,323 487,875,549 485,076,381 1,434,776,821 Equity investments 12,236,465 - - - 12,236,465 Total financial assets 5,099,232,346 2,518,570,750 503,025,987 518,125,935 1,559,509,674

Financial liabilities Deposits from banks - 3,945,938 3,945,938 - - Deposits from customers 3,538,538,820 1,022,353,891 661,940,918 463,745,415 1,390,498,596 Borrowings 370,474,208 - 7,727,987 7,587,228 355,158,992 Total financial liabilities 3,912,958,966 1,026,299,829 669,668,905 471,332,643 1,745,657,588

SOCIETE GENERALE GHANA PLC 86 Notes to the Financial Statements cont’d

As at 31 December 2019 Below 3 3 to 6 6 to 12 Above 1 Total months months months year GH¢ GH¢ GH¢ GH¢ GH¢ Financial assets Cash and cash equivalents 1,295,640,731 1,295,640,731 - - - Non-pledged trading assets 57,523,935 57,523,935 - - - Investment securities 95,754,709 78,093,686 1,489,699 5,240,842 10,930,482 Loans and advances to customers 2,972,249,910 642,794,699 299,630,653 466,613,827 1,563,210,731 Equity investments 8,862,900 - - - 8,862,900 Derivative asset - - - - Total financial assets 4,430,032,185 2,074,053,051 301,120,352 471,854,669 1,583,004,113 Financial liabilities Deposits from banks 25,675,390 25,675,390 - - - Deposits from customers 3,228,781,977 1,257,691,057 410,390,516 408,527,647 1,152,172,757 Borrowings 182,921,653 116,788,312 12,581,684 7,101,827 46,449,830 Total financial liabilities 3,437,379,020 1,400,154,759 422,972,200 415,629,474 1,198,622,587

Structural interest rate 5.9 million (i.e. between GH¢ -5.83 and 31.25 million) The interest rate risk is the incurred risk in case of interest This limit is -1.12% and 6.02% of shareholders’ equity rate variations because of all on-and off- financial in reference to the lower and upper limits respectively. position operations, except operations subject to market risks. Global Interest Rate Risk is corresponding In order to quantify its exposure to structural interest to interest rate on the banking portfolio. rate risks, Societe Generale Ghana PLC analyses all fixed- rate assets and liabilities on future maturities The strategic management of liquidity is done at a high to identify any gaps. These positions come from their level of senior management (ALCO); review of results maturities. on weekly basis in line with competition and economic conditions and also ensure that regulatory requirements Once the Bank has identified the gaps of its fixed- rate are met. positions (surplus or deficit), it calculates the sensitivity (as defined above) to variations in interest rates. This The risk management is supervised by the Group. Limits sensitivity is defined as the variation of the net present are defined at Group consolidated level and at the level value of the fixed-rate positions for an instantaneous of each Group consolidated entity, and are validated by parallel increase of 1% of the yield curve. the Credit Risk Committee. Finance department of the Group is responsible for checking the risk level of Societe Interest rate risk exposure Generale Ghana PLC. Interest rate risk exposure is the risk that the fair value or future cash flows of a financial instrument will Societe Generale Ghana PLC’s main aim is to reduce fuctuate because of changes in market interest rates. its exposure to structural interest rate risk as much as The Bank’s exposure to the risk of changes in market possible. To this end, any residual interest rate risk interest rates relates primarily to the financial assets exposure must comply with the sensitivity limits set by and liabilities with variable/foating interest rates. the Finance Committee. The sensitivity is defined as The following table demonstrates the sensitivity to a the variation in the present value of future (maturities reasonable possible change in interest rates, with all of up to 20 years) residual fixed rate positions (surplus other variable held constant, of the Bank’s profit before or deficits) for a 1% parallel increase in the yield curve tax (through the impact on the floating rate financial (i.e. this sensitivity does not relate to the sensitivity assets and liabilities). of annual net interest income). The limit for Societe Generale Ghana PLC is within the range of EUR -1.1 and

87 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

Increase/decrease Effect on profit Effect on equity in basis points before tax 2020 31 December 2020 2020

USD +1% -1% 8,996,743 (8,996,743) 6,297,720 (6,297,720) EURO +1% -1% 1,316,850 (1,316,850) 921,795 (921,795) GH¢ +1% -1% 17,937,903 (17,937,903) 12,556,532 (12,556,532)

31 December 2019 2019 2019 USD +1% -1% 8,205,816 (8,205,816) 5,744,071 (5,744,071) EURO +1% -1% 1,655,825 (1,655,825) 1,159,078 (1,159,078) GH¢ +1% -1% 19,582,617 (19,582,617) 13,707,832 (13,707,832)

Market risk y define and monitor alert procedures Market risk is the risk of losses being incurred as a result y make sure that the Back Office is really of adverse movements in interest or exchange rates and independent of the Front Office. arises in the Bank’s treasury activities. Market risk is controlled by interest mismatch and Exchange rate sensitivity analysis foreign currency open position limits approved by the The Bank’s foreign exchange exposures comprise trading Executive Committee of the Bank and monitored daily. and non-trading foreign currency translation exposures. The foreign currency exposure analysis of the Bank is Foreign exchange exposures are principally derived shown in the currency exposure table below. from customer driven transactions. The sensitivity rates used represents management’s assessment of This risk is managed by the establishment of limits, the reasonably possible change in foreign exchange monitoring of exposures on a daily basis and ensuring rates. The sensitivity analysis includes only outstanding that regulatory requirements are met. foreign currency denominated monetary items and The task of the Market Risk Committee is to: adjusts their translation at the period end for the changes in foreign currency rates. A positive number y identify, assess and monitor the market risks below indicates an increase in Profit or Equity whilst a generated by transactions made on behalf of: negative number indicates a decrease in Profit or Equity. y the local Financial department (cash, liquid assets, The profits below are the result of a net long exposure balance sheet hedging) in relation with the Assets in the foreign currency coupled with an increase in the and Liabilities Management Committee foreign currency rate. The losses on the other hand are mainly due to a net long exposure in the foreign currency y professional customers (companies and coupled with a decrease in the foreign currency rate. institutional investors)

Increase/decrease Effect on profit Effect on equity in basis points before tax 2020 2020 2020 GH¢ GH¢ GH¢ GH¢ USD +1% -1% (181,787) 181,787 (127,251) 127,251 GBP +1% -1% 6,777 (6,777) 4,744 (4,744) EUR +1% -1% (219,505) 219,505 (153,654) 153,654 Other currencies +1% -1% 11,960 (11,960) 8,372 (8,372)

SOCIETE GENERALE GHANA PLC 88 Notes to the Financial Statements cont’d

Increase/decrease Effect on profit Effect on equity in basis points before tax 2020 31 December 2020 2020 GH¢ GH¢ GH¢ GH¢ USD +1% -1% (197,179) 197,179 (138,026) 138,026 GBP +1% -1% 25,276 (25,276) 17,693 (17,693) EUR +1% -1% (183,167) 183,167 (128,217) 128,217 Other currencies +1% -1% 20,016 (20,016) 14,011 (14,011)

The following methods and assumptions used in the computation of sensitivity analysis i. Foreign currency exposure is assumed to remain at constant values (closing balances at the end of the year). ii. Use of average exchange rate for the year under consideration. iii. Use of pre-determined stress levels (relevant range of stress level) based on extreme or worst case scenarios. iv. There are no changes in the methods and assumptions from the previous periods. v. The current corporate tax rate is applied in determining the effect on profit and equity.

Currency risk Currency risk is the risk that the value of a financial instrument will fuctuate due to changes in foreign exchange rates. In Ghana, market activities is mostly affected by movements in the dollar. The cedi has depreciated consistently over the last three years. The Statement Of Financial position of SG Ghana is structured to take the upside of such a depreciating trend. The currency risk of the bank has been stable over a three year period.SG Ghana manages currency risk by monitoring the open currency positions on a daily basis. The objective of monitoring the open position in foreign currency is to manage foreign exchange risk due to movements in rates as well as changes in liquidity positions. The bank has adopted the Bank of Ghana requirement that banks maintain a total open position which is not more than 10% of their net worth. Within this limit, banks are also required to maintain single currency open positions not more than 5% of net worth. The bank uses the mid revaluation rates published by the Bank of Ghana at the end of each working day. The year end rates used for foreign exchange translations of the major currencies are as follows: USD - 5.7602, EUR - 7.0643 and GBP - 7.8742.

Currency exposure The table below summarises the Bank’s exposure to foreign exchange rate risks at year- end. The amounts stated in the table are the cedi equivalent of the foreign currencies.

Increase/decrease Effect on profit Effect on equity in basis points before tax 2019 2019 2019 31 December 2020 USD GBP EURO Others Total GH¢ GH¢ GH¢ GH¢ GH¢ Assets Cash and balances with bank of ghana 6,911,313 5,241,501 6,205,637 - 18,358,451 Due from other banks and financial institutions 712,537,223 21,644,828 297,829,013 1,221,934 1,033,232,997 Other assets 680 - 0 40 721 Loan and advances to customers 899,674,319 383 131,684,968 - 1,031,359,670 Total assets 1,619,123,534 26,886,711 435,719,618 1,221,974 2,082,951,838

89 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

Liabilities USD GBP EURO Others Total GH¢ GH¢ GH¢ GH¢ GH¢ Due to other banks and financial institutions 338,987,770 - 24,725,050 - 363,712,820 Due to customers 1,158,019,032 25,036,008 246,159,468 25,948 1,429,240,457 Other liabilities 71,173,055 1,173,006 187,475,690 - 259,821,751 Total liabilities 1,568,179,857 26,209,014 458,360,208 25,948 2,052,775,028 Net on balance sheet position 50,943,677 677,697 (22,640,590) 1,196,026 30,176,810 Net off balance sheet position (69,122,400) - 690,067 - (68,432,333) Net open position (18,178,723) 677,697 (21,950,523) 1,196,026 (38,255,522)

31 December 2019 USD GBP EURO Others Total GH¢ GH¢ GH¢ GH¢ GH¢ Assets Cash and balances with bank of ghana 6,852,179 3,013,824 3,674,457 - 13,540,460 Due from other banks and financial institutions 599,859,111 22,886,210 127,399,835 1,869,587 752,014,743 Other assets 654 269 - - 923 Loan and advances to customers 723,370,158 358 159,512,834 - 882,883,350 Total assets 1,330,082,102 25,900,661 290,587,126 1,869,587 1,648,439,476

Liabilities Due to other banks and financial institutions 148,630,151 - 27,951,075 - 176,581,226 Due to customers 1,136,169,312 22,512,871 145,087,337 22,771 1,303,792,291 Other liabilities 38,893,330 860,133 146,331,188 361 186,085,012 Total liabilities 1,323,692,793 23,373,004 319,369,600 23,132 1,666,458,529 Net on balance sheet position 6,389,309 2,527,657 (28,782,474) 1,846,455 (18,019,053) Net off balance sheet position (37,075,790) - 708,737 - (36,367,053) Net open position (30,686,481) 2,527,657 (28,073,737) 1,846,455 (54,386,106)

Operational risk Group BCP policy and methodology which is consistent with Operational risk is the exposure to financial or other damage international standards. arising through unforeseen events or failure in operational The Bank has also created a comprehensive and independent processes and systems. Examples include inadequate controls review of the Business Continuity Planning and Operational and procedures, human error, deliberate malicious acts Risk processes. including fraud and business interruption. The Operational Risk Committee’s task is to identify and assess Operational procedures are documented in an Operations the impact of operational risks on the smooth running and Manual. profitability of the bank, and to define and implement the The Bank has established and implemented an integrated strategy used to control them by continuously adapting the Operational Risk (OR) framework comprising (i) Loss Collection methods used to bring them into conformity with regulations in policy, (ii) Key Risk Indicators (KRI) policy, (iii) Permanent force and Societe Generale Group standards. Supervision policy, (iv) Compliance and anti- money laundering. To achieve this, the committee: Policy which set out the organizational structure, overall policy framework, processes and systems for identifying, assessing, y makes sure that the resources made available to the monitoring and controlling/ mitigating operational risks in the Operational Risk team are in line with the Bank’s level of bank. exposure. Societe Generale Ghana PLC has adopted the Societe Generale

SOCIETE GENERALE GHANA PLC 90 Notes to the Financial Statements cont’d

y is responsible for the introduction and satisfactory y to ensure that professional and financial market operation of permanent supervision, and for the regulations are respected. bank’s Operational Risk control. y to prevent and manage any potential conficts of y is informed of the main types of operational risks interest with respect to customers. and of the main operating losses recorded over the y to train and advise staff and increase their period. awareness of compliance issues. y monitors the implementation of plans of action intended to correct and reduce Operational Risks. 37. Regulatory breaches During the year under review, the bank breached four y validates the findings of regulatory exercises sections of the Specialised Deposit -Taking Instiutuions (Risk & Control Self Assessment (RCSA), scenario Act, 2016 (Act 930). The Bank was levied an amount of analysis, KRI), introduces and monitors corrective GH¢ 677,799.94 in accordance with the relevant sections action plans. of the act. y introduces, maintains and tests the BCP and the Crisis management system. 38. Segmental reporting For management purposes, the bank is organized y makes sure that the work done by Permanent broadly into three operating segments based on Supervision is of good quality and approves its products and services as follows; report. y Retail Banking - This unit primarily serves the y takes corrective action in the event of a deterioration needs of individuals, high net worth clients, in the control environment. institutional clients and very small businesses. It y keeps up to date with legislative and regulatory is principally responsible for providing loans and changes, as well as recommendations relating to other credit facilities, as well as mobilizing deposits periodic control. and providing other transactions. y drafts and presents its activity report particularly y Corporate Banking -This unit is principally intended for the Audit and Accounts Committee. responsible for providing loans and other credit facilities, as well as mobilizing deposits Non compliance & reputation risk and the prevention and providing other transactions to the Bank’s of money laundering corporate clients. The compliance function ensures that the risks of legal, y Treasury -This unit undertakes the bank’s funding administrative and/or disciplinary penalties, financial activities. It also manages the liquidity position of losses or injury to reputation, arising out of or in the Bank through activities such as borrowings, connection with failure to comply with local legislative and investing in liquid assets such as short-term and/or regulatory banking provisions, ethics and placements and government debt securities. professional practices, as well as Societe Generale Group instructions, standards and/or processes are identified Management monitors the operating results of each and controlled. Using incidence of non compliance and business units separately for the purpose of making fines, the risk of non compliance has been stable over a decisions about resource allocation and performance three year period. assessment. Segment performance is evaluated based on operating profit or loss which in certain respects is The bank’s compliance activity is overseen at a high level measured differently from operating profit or loss in the by a senior management officer, the Head of Compliance financial statements. The main source of difference is and through the Compliance committee chaired by the the use of a transfer pricing mechanism in apportioning Managing Director. investment income for the segment. The main tasks of the compliance function are namely: y to define in accordance with legal and regulatory requirements, the policies, principles and procedures applicable to compliance and the prevention of money laundering and terrorist financing and ensure that they are implemented.

91 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

31 December 2020 Retail Banking Corporate Banking Treasury Total GH¢ GH¢ GH¢ GH¢ Revenue Interest & similar revenue (3 parties ) 253,301,527 266,161,852 - 519,463,379 Interest & similar expense (63,574,762) (50,185,179) (491,470) (114,251,411) Net interest margin 189,726,765 215,976,673 (491,470) 405,211,968

Fees & commission revenue 47,445,767 29,303,732 398,607 77,148,106 Fees & commission expense (21,145,168) (1,702,041) - (22,847,209) Net commission income 26,300,599 27,601,691 398,607 54,300,897 Net trading revenue 11,598,375 30,058,677 3,193 41,660,244 Net income from other financial instruments carried at fair value - - 52,417,416 52,417,416 Other operating income (4,059,216) (593,346) 7,689 (4,644,872) Total other operating income 7,539,159 29,465,331 52,428,298 89,432,788 Total operating income 223,566,523 273,043,695 52,335,435 548,945,653

Net impairment loss on financial assets (16,853,410) (16,496,164) - (33,349,574) Personnel expenses (64,806,086) (53,088,277) (10,797,483) (128,691,845) Depreciation/ amortisation (16,566,524) (14,283,803) (2,737,837) (33,588,164) Other operating expenses (53,631,154) (65,500,185) (12,554,696) (131,686,035

Total operating expense (135,003,764) (132,872,265) (26,090,016) (293,966,044)

Profit before tax 71,709,349 123,675,266 26,245,419 221,630,035

Total assets 2,063,062,479 3,036,181,771 15,962,102 5,115,206,352

Total liabilites 2,006,059,483 2,183,551,980 - 4,189,611,463

No revenue from transactions with a single customer or counter party amounted to 10% or more of the Bank’s total revenue in 2020 or 2019 .All Segment revenue are from external customers only. The Accounting policies of the reportable segments are the same as the Bank. There were no intra company profit for the period under review.

SOCIETE GENERALE GHANA PLC 92 Notes to the Financial Statements cont’d

31 December 2019 Retail Banking Corporate Banking Treasury Total GH¢ GH¢ GH¢ GH¢ Revenue Interest & similar revenue (3 parties ) 215,680,234 238,368,523 - 454,048,757 Interest & similar expense (49,344,881) (35,865,833) (3,024,343) (88,235,057) Net interest margin 166,335,353 202,502,690 (3,024,343) 365,813,700

Fees & commission revenue 43,260,939 29,927,525 8,411 73,196,875 Fees & commission expense (21,591,067) (1,562,957) - (23,154,024) Net commission income 21,669,872 28,364,568 8,411 50,042,851 Net trading revenue 9,191,732 25,285,454 39,588 34,516,774 Net income from other financial instruments carried at fair value 367,618 367,618 39,011,224 39,746,460 Other operating income 15,212,042 3,683,979 40,451 18,936,472 Total other operating income 24,771,392 29,337,051 39,091,263 93,199,706 Total operating income 212,776,617 260,204,309 36,075,331 509,056,257

Net impairment loss on financial assets (18,598,044) (36,324,622) - (54,922,666) Personnel expenses (62,111,711) (53,102,181) (8,023,471) (123,237,363) Depreciation/ amortisation (16,323,162) (14,804,928) (2,052,590) (33,180,680) Other operating expenses (50,585,998) (61,861,566) (8,576,632) (121,024,196)

Total operating expense (129,020,871) (129,768,675) (18,652,693) (277,442,239)

Profit before tax 65,157,702 94,111,012 17,422,638 176,691,352

Total assets 1,691,279,929 2,737,953,558 14,675,721 4,443,909,208

Total liabilites 1,622,482,605 2,019,465,170 - 3,641,947,775

93 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

39. Capital d. Revaluation reserve This amount comprises revaluation of property, plant Capital management and equipment. The primary objectives of the Bank’s capital management are to ensure that the bank complies e. Statutory reserve with externally imposed capital requirement by Bank This is amount set aside from annual profit as a non- of Ghana and that the bank maintains strong credit distributable reserve in accordance with regulatory rating and healthy capital ratios in order to support its requirements. business and to maximise shareholders value. The Bank The transfer to Statutory Reserve Fund is in compliance manages its capital structure and makes adjustment to with the Banks and Specialized Deposit Taking it in the light of changes in the economic conditions and Institutions Act, 2016 (Act 930). risk characteristics of its activities. In order to maintain or adjust the capital structure, the Bank may adjust the f. Credit risk reserve amount of dividend payments to shareholders, return This is amount set aside from retained earnings as a capital to shareholders or issue capital securities. No non-distributable reserve to meet minimum regulatory changes were made in the objectives, policies and requirements in respect of allowance for credit losses for processes from the previous years. non-performing loans and advances. a. Capital definition g. Regulatory capital The Bank’s capital comprises stated capital, share deals Regulatory capital consist of Tier 1 capital, which account, retained earnings including current year profit comprises share capital, share deals account, retained and various reserves the company is statutorily required earnings including current year profit, foreign currency to maintain. As a bank, it also has regulatory capital as translation and minority interests less accrued dividend, defined below: net long positions in own share and goodwill. Certain b. Stated capital adjustments are made to IFRS-based result and reserves, This amount is made up of issue of shares for cash and as prescribed by the Central Bank of Ghana. The other transfers from retained earnings. component of regulatory capital is Tier 2 capital which includes revaluation reserves. c. Income surplus This amount represents the cumulative annual profits h. Other reserves after appropriations available for distribution to This is made up of available for sale reserve on debt shareholders. securities and available for sale on equity investments. Available for sale reserve on debt securities records unrealized gains and losses on government securities.

2020 2019 Available for sale Available for sale reserve reserve

Opening balances - - Investment securities measured at FVOCI- gross 1,781,205 - Investment securities measured at FVOCI- tax (445,301) - Total other reserves 1,335,904 -

SOCIETE GENERALE GHANA PLC 94 Notes to the Financial Statements cont’d

i. Capital adequacy The adequacy of the Bank’s capital is monitored using, among other measures, the rules and ratios established by the Basel Committee on Banking Supervision and adopted by the Bank of Ghana. The capital adequacy ratio of the Bank as of 31 December 2020 is shown below: 2020 2019 GH¢ GH¢ Tier 1 capital 567,738,470 480,824,924 Tier 2 capital 75,391,283 73,607,798 Total regulatory capital 643,129,753 554,432,722 Total risk weighted assets 3,769,564,149 3,680,389,919 Common equity tier 1 / rwa 15.06% 13.06% Capital adequacy ratio 17.06% 15.06%

40. Compliance status of externally imposed capital requirement During the past year Societe Generale Ghana PLC had complied in full with all its externally imposed capital requirements. Analysis of shareholdings

Category Number of Number of Percentage shareholders shares Holding % 1-1,000 26,972 8,247,086 1.16% 1,001-5,000 5,203 8,812,916 1.24% 5,001-10,000 894 5,826,167 0.82% Over 10,000 682 686,255,198 96.77% 33,751 709,141,367 100.0%

41. Subsequent events Since 31 December 2019, the spread of COVID-19 has severely affected many local economies around the globe with Ghana seeing its first case on 12 March 2020. In many countries, most businesses are being adversely affected or forced to cease/ limit operations for long or indefinite periods. This is mainly because measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. The Company has determined that these events are non-adjusting subsequent events as the COVID-19 is indicative of a condition that arose after the end of the reporting period. Accordingly, the financial position and results of operations as of and for the year ended 31 December 2020 have not been adjusted to refect their impact.

95 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

42. Value added statement 2020 2019 Value added statements for the year ended 31 December 2020 GH¢ GH¢ Interest earned and other operating income 686,044,273 619,821,376 Direct cost (137,098,620) (111,389,081) Value added by banking services 548,945,653 508,432,295

Non - banking income - 623,961 Impairments (33,349,574) (54,922,666) Value added 515,596,079 454,133,590

Distributes as follows: To employees :- Directors (without executives) (803,027) (1,309,833) Executive directors (2,391,327) (2,086,712) Other employees (126,300,518) (121,150,652) To government :- Income tax (67,421,120) (48,149,164) To providers of capital :- Dividend to shareholders To expansion and growth :- Depreciation (32,459,174) (31,877,648) Amortisation (1,128,990) (1,303,033) Other operating cost (130,883,008) (121,024,195) To retained earnings 154,208,915 128,542,186

SOCIETE GENERALE GHANA PLC 96 Notes to the Financial Statements cont’d

43. Twenty Largest Shareholders Shareholders Number of Account Name Holding % Owned 1 SG-FINANCIAL SERVICES HOLDING, 427,079,030 60.22 2 SOCIAL SECURITY AND NATIONAL INSURANCE TRUST, 137,262,404 19.36 3 OFORI, DANIEL 48,241,241 6.80 4 SCGN / ENTERPRISE LIFE ASS. CO. POLICY HOLDERS 11,589,540 1.63 5 AMENUVOR, GIDEON 3,693,934 0.52 6 SCGN/CITIBANK KUWAIT INV AUTHORITY 3,428,568 0.48 7 SOCIETE GENERAL EMPLOYEES’ SHARE OWNERSHIP 3,348,127 0.47 8 SCGN/DATABANK BALANCED FUND LIMITED 2,538,447 0.36 9 ENO INTERNATIONAL LLC, 2,494,761 0.35 10 SCGN/JPMORGAN BK LUX SA RE ROBECO AFRIKA FONDS N.V, 056898600288 2,193,248 0.31 11 SCGN/CACEIS BANK RE:HMG GLOBETROTTER 2,125,646 0.30 12 SCGN/’EPACK INVESTMENT FUND LIMITED TRANSACTION 2,113,443 0.30 13 ADJEPON-YAMOAH, BEATRICE E. MRS 1,982,930 0.28 14 EDC/TEACHERS EQUITY FUND, 1,746,206 0.25 15 HFCN/ EDC GHANA BALANCED FUND LIMITED 1,381,333 0.19 16 SCGN/SSB EATON VANCE TAX-, MANAGED EMERGING MARKET FUND 1,345,362 0.19 17 SCGN/GHANA MEDICAL ASS. PENSION FUND 1,187,696 0.17 18 MR, PHILIP OPOKU-MENSAH 1,138,474 0.16 19 SCGN:ENTERPRICE LIFE, C/O STANDARD CHARTERED E L A L 1,025,922 0.14 20 MBG ESSPA SCHEME 1,009,233 0.14 Total 656,925,545 92.64 Others 52,215,822 7.36 Grand Total 709,141,367 100.00%

44. Director’s shareholding

Director Shareholding NIL -

45. ANALYSIS OF SHAREHOLDING AT 31 DECEMBER 2020 NUMBER OF SHAREHOLDERS NUMBER OF SHARES % HOLDING NON DEPOSITORY 24,217 19,547,655 2.76 DEPOSITORY (CSD) 9,534 689,593,712 97.24 TOTAL 33,751 709,141,367 100.00

97 SOCIETE GENERALE GHANA PLC Notes to the Financial Statements cont’d

NOTES: v. A unique token number will be sent to shareholders by i. In compliance with the current restrictions on public email and/or SMS from 14 March 2021 to give them access gatherings in force pursuant to the imposition of to the meeting. Shareholders who do not receive this Restrictions Act, 2020 (Act 1012) and consequent token can contact the Registrars NTHC Company Limited, Regulatory Directives, attendance and participation by all Martco House, Dede Awula Street, Off Kwame Nkrumah members and/or their proxies in this year’s Annual General Avenue, Adabraka Accra or on telephone number 059 310 Meeting of the Company shall be strictly virtual (i.e. by 5735 or by email [email protected] or any time online participation). after 14 March 2021 but before the date of the AGM to be sent the unique token. ii. A member entitled to attend and vote at the Annual General Meeting may appoint a proxy to attend (via online vi. To gain access to the Virtual Annual General Meeting, participation) and vote on his/her behalf. Such a proxy shareholders must visit https://sgghanaagm.com and need not be a member of the Company. input their unique token number shared with them to gain access to the meeting. For shareholders who do iii. The appointment of a proxy will not prevent a member not submit proxy forms to the Registrar of the Company from subsequently attending and voting at the meeting prior to the meeting they may vote electronically during (via online participation). Where a member attends the Virtual AGM; again, using their unique token number. the meeting in person (participates on line), the proxy Further assistance on accessing the meeting and voting appointment shall be deemed to be revoked. electronically can be found on https://societegenerale. com.gh and https://sgghanaagm.com iv. A copy of the Form of Proxy can be downloaded from the Societe Generale Ghana PLC website https:// For further information, please contact the Registrar: societegenerale.com.gh and may be filled and sent via NTHC Company Limited email to [email protected] or deposited at the Martco House, Dede Awula Street registered office of the Registrars of the Company, NTHC Off Kwame Nkrumah Avenue Company Limited, Martco House, Dede Awula Street, PO Box KIA 9563, Accra Off Kwame Nkrumah Avenue, Adabraka Accra to arrive Telephone No: 059 310 5735 no later than 48 hours before the appointed time for the Email: [email protected] meeting. Accessing and Voting at the Virtual AGM

SOCIETE GENERALE GHANA PLC 98 PROXY FORM

SOCIETE GENERALE GHANA PLC PROXY FORM FOR ANNUAL GENERAL MEETING

I/We ……………………………………………………………………...... ……………………………….……………...... ……. (Block Capital Please)

Of …………………………………………………………………………………………………………………………...... ….. being member/members of SOCIETE GENERALE GHANA PLC

hereby appoint…………………………….……….……………………………………………………………………...... ….…. insert full name)

Of………………………………….………………………………………………………………………………….…...... ………….

(or failing him the duly appointed Chairman of the meeting) as my/our Proxy to vote for me/us at the Virtual Annual General meeting to be held on Thursday 30 September 2021at 11.00 a.m. and at every adjournment thereof): Please indicate with an X how you wish your vote to be cast

RESOLUTION FOR AGAINST 1. To receive the accounts 2. To re-elect as non-executive director Laurette Otchere 3. To elect as Independent Non-Executive Director Francis Awua-Kyerematen 4. To approve directors fees 5. To authorize the directors to fix the auditors fees

Signed this …………… day of ……………………...... …… 2021

Shareholder’s Signature…………...... …………………………….

99 SOCIETE GENERALE GHANA PLC RESOLUTION TO BE PASSED AT THE ANNUAL GENERAL MEETING

BOARD RESOLUTIONS 4. APPROVE DIRECTORS FEES The Board of Directors will be proposing the following In accordance with Section 185(1)(2) of the Companies resolutions which would be put to the Annual General Act, 2019( Act 992) and Section 78(3) of the Constitution Meeting: of the Bank it is hereby proposed that the Directors remuneration be paid at such a rate not exceeding an 1. RECEIVE THE 2020 ACCOUNTS aggregate of GH¢648,592.73 It is further proposed that the The Board shall propose the acceptance of the 2020 Board of Directors be given the mandate to approve the Financial Statements as the true and fair view of the state emoluments of the Executive Director. of affairs of the company for the year ended 31 December 2020. 5. AUTHORISATION OF THE DIRECTORS TO DETERMINE THE REMUNERATION OF THE AUDITORS 2. RE-ELECT DIRECTORS In accordance with Section 140 (1)(a) of the Companies Act To re-elect Directors, the following Director retiring by ,2019 (Act 992) and Section 54(2) (d) of the Constitution rotation pursuant to Section 88 (1) of the Constitution of of the Bank, the Board of Directors recommend that the the Company’s Constitution retire by rotation and being current Auditors Messrs Ernst & Young continue as Auditors eligible; offers herself for re-election as a director:- of the Company. The Board will request that they fix the fees of the Auditors. • Mrs. Laurette Otchere

3. ELECTION OF DIRECTORS In accordance with Section 72(1) and 90 of the Constitution of the Bank Mr Francis Awua-Kyerematen was appointed as a Independent Non Executive Director of the Bank and offers himself for election.

SOCIETE GENERALE GHANA PLC 100 THE REGISTRAR NTHC LIMITED MARTCO HOUSE P.O.BOX KA 9563 AIRPORT ACCRA

FOLD HERE

FOLD HERE

101 SOCIETE GENERALE GHANA PLC NAME OF BRANCH ADDRESS PHONE NO DIGITAL ADDRESS GREATER ACCRA VISIT ANY Accra Main P. O. Box 13119, Accra 0302 208 600 / 0302911021 GA-047-7257 Accra New Town P O Box 13119, Accra 0302228515 GA-044-7774 Achimota P O Box 13119, Accra 0303974818 GA-044-7774 Airport City P O Box 13119, Accra 0307011347 GL-126-6927 OF OUR 39 Ashaiman P.O.Box Co 2885, Tema 0307011518 / 0307011654 GB-018-9776 Burma Camp Spot bank P O Box 13119, Accra 030 7011525 GL-088-0179 Dansoman P O Box 13119, Accra 0302 322 547-9 GA-471-9567 East Legon P O Box 13119, Accra 03022543728/9 GA-288-4215 OUTLETS Faanofa P O Box 13119, Accra 0302 252500 GA-099-3044 Kaneshie P O Box 13119, Accra 0302 682 846 GA-263-8749 Kaneshie Market P O Box 13119, Accra 0303 978422 GA-313-4497 Lotteries Agency P O Box 13119, Accra 030 2667370/2672610 GA-143-9373 ACROSS Madina P O Box 13119, Accra 0577650907 / 0307012922 GM-018-0749 North Industrial Area P O Box 13119, Accra 0302 229811 GA-171-3067 Okaishie P O Box 13119, Accra 0577650384 / 5 GA-141-2594 Osu P O Box 13119, Accra 0302 790384 GA-035-5968 GHANA Pig Farm Spot Bank P O Box 13119, Accra 030 2934972 GA-061-0461 Premier Towers P O Box 13119, Accra 030 2668650/2667146/2682207 GA-110-5597 Spintex Road P O Box 13119, Accra 0302 9619Lorem93 ipsumGT-334-3510 Tema Community 2 P O Box Co 2885, Tema 0303202558 GT-055-2185 Tema Fishing Harbour P O Box Co 1668, Tema 030 3204462/3202288 GT-062-1084 Tema Motorway Spot Bank P.O.Box Co 2885, Tema 030 2959127 GB-009-6202 UPPER EAST UPPER WEST Tudu P O Box 13119, Accra 0577 650 930 GA-142-6841 NORTH EAST

Wa ASHANTI REGION NORTHERN Adum P O Box 4542, Kumasi 0577 650922 / 0322 025379 Kumasi Central P O Box 4542, Kumasi 0577 650972-4 Suame P O Box 4542, Kumasi 0303973691 SAVANNAH Kejetia P O Box 4542, Kumasi 020 2801070 AK -006-1536

BONO REGION BONO Berekum P O Box 49, Berekum 035 2222261/2222262 OTI P O Box 1131, Sunyani 0352027050 BS-0006-3640 BONO EAST

Sunyani CENTRAL REGION ASHANTI Cape Coast P O Box 1019, Cape Coast 0332132159 CC-023-6570 Dunkwa P O Box 64, Dunkwa 0302947741 CG-0702-0351 AHAFO Kumasi Kasoa P O Box 13119, Accra 0302984479 / 0302963765

Adum Suame EASTERN EASTERN REGION Asafo Kumasi Central Ho WESTERN Kejetia NORTH VOLTA Akim Oda P O Box 325, Akim Oda 0577650949/50 Koforidua P O Box 987, Koforidua 034 2022236/2022778

Tema Ashaiman Tema Motorway CENTRAL Tema Fishing Habour Accra Tema Comm. 1 Tarkwa Tema Comm. 2 NORTHERN REGION Spintex Kasoa GREATER Osu Madina Tamale P O Box 192, Tamale 0372023253 NT-0008-6651 WESTERN ACCRA East Legon Tudu Airport Achimota Cape Coast Okaishie Lotteries Kaneshie Pig Farm Accra Main Burma Camp Takoradi Takoradi Accra New Town Premier Towers Dansoman Faanofa UPPER EAST REGION Market Circle Main North Industrial Area Bolgatanga P O Box 344, Bolgatanga 0382011064 UB-0001-1721

UPPER WEST REGION Wa P O Box 240, Wa 0392022147 XW-0018-3163

VOLTA REGION Ho P O Box HP - 360, Ho 0362026651

WESTERN NORTH

REGION Bibiani P O Box 58, Bibiani 031 2093031/2093032 WB-0001-2569

WESTERN REGION Tarkwa P O Box 219, Tarkwa 031 2320951/2320950 WT-0004-1130 CALL Takoradi P O Box 660, Takoradi 0577650941 0302 214 314 to speak to our Takoradi Market Circle P O Box 660, Takoradi 0312033288

24/7 contact service agents DIGITAL ZONES 37 MILLITARY HOSPITAL P. O. Box 13119, Accra 0302 208600 GA-007-6869 METHODIST UNIVERSITY P. O. Box 13119, Accra 0302 208600 GA-504-9707 UNIVERSITY OF GHANA P. O. Box 13119, Accra 0302 208600 GA-419-6620 A&C MALL P. O. Box 13119, Accra 0302 208600 GA-412-0993

Call 0302 208 60 HEAD OFFICE BUSINESS UNITS Ext 2023 for enquires about NAME OF DEPARTMENT ADDRESS PHONE NO GA-048-6249 CORPORATE BANKING P. O. Box 13119, Accra 0302 208600 GA-048-6249 all corporate products SME BANKING P. O. Box 13119, Accra 0302 208600 GA-048-6249 GLOBAL TRANSACTION P. O. Box 13119, Accra 0302 208600 BANKING GA-048-6249

SOCIETE GENERALE GHANA PLC 102 Notes

SOCIETE GENERALE GHANA PLC 103